INSURANCE

Types of personal insurance

• Term Life
• Total and Permanent Disablement (TPD)
• Trauma
• Income Protection
• Business Expenses

Use/Purpose

• Term Life – provides a lump sum to cover debt, as well as income and lifestyle requirements of surviving dependents
• TPD – typically provides a lump sum to cover illness or injury that totally and permanently prevents one from working again
• Trauma – provides a lump sum if a person suffers a ‘defined event' such as heart attack, cancer etc
• Income protection – pays up to 75% of income if you cannot work for an extended period

Issues to consider with insurance are

• at what level to self insure (ie take on the risk yourself) and how much risk to outsource to an insurance company
• Tax Considerations – for example, where to hold the insurance (super/non-super)
• Factors that influence premiums are age, sex, smoker/non-smoker, occupation