Under which life insurances can I claim and when?

The importance of being prepared for the unexpected has been reinforced to many of us by the current worldwide pandemic.

There are many types of insurance available. These covers protect our homes (contents), cars (comprehensive), bodies (health), businesses, investments (landlord or mortgage insurance) through to the value of our future earnings – possibly our greatest asset.

With regard to protecting your livelihood, there are a few important insurance distinctions to understand.

Trauma Insurance

Trauma insurance or critical illness insurance pays an agreed lump sum amount to cover immediate medical expenses and other financial needs if you suffer a critical illness or serious injury. These include cancer, a heart attack, major head injury or stroke. Trauma insurance does not cover mental health conditions.

TPD insurance payouts ease the financial burden for you and your family by providing financial assistance during a crisis, when it is most needed.

Total and Permanent Disability (TPD)

TPD insurance provides a cash lump sum if you suffer a permanent disability resulting from illness or injury, which prevents you from ever working again. There are regulations around claiming this insurance and usually you can make a claim after not working for a period of three or six months.

TPD insurance allows you to focus on your recovery rather than on raising funds for treatment and lifestyle adjustments.

Life Insurance

The purpose of life insurance is to provide you and your family or loved ones with financial security if you were to pass away, become terminally ill, or in certain situations, become unable to work. Policies vary and can pay a benefit at the time of your death, disability or if you are diagnosed with a specified illness.

Life cover means that the loved ones you leave behind aren’t burdened with financial stress while recovering emotionally from your death or learning to cope with the results of your negative health event.

Income protection

Income protection insurance is a monthly benefit paid to replace your income if you are unable to work due to illness or injury. Typically, payments are around 75% of your normal income. In some instances, you can claim part of the premium cost in your tax return.

It’s important to know where your insurances currently stand. Many people hold these important future-proofing insurances within their Superannuation policies. Often however, such group covers don’t cover you for what you need and class you into an occupational category which doesn’t match your occupation and can affect any claim you might need to make.

Major insurance industry changes are coming in late 2021 which will severely limit life and income insurance policy flexibility and pay-out generosity.

To check that your insurances are covering you adequately, click here to speak to one of our Advisers.