What is Life Cover?

Term Life Insurance provides a lump sum payment on the death or terminal illness of the insured person. This type of insurance carries no savings (investment) component.Mother_and_daughter large

What is Total and Permanent Disability insurance (TPD)?

TPD provides a lump sum if you suffer an illness or injury that leaves you totally and permanently disabled.

Why you need these types of insurances?

Have you ever thought how your family would cope financially if you were to pass away unexpectedly or become permanently disabled? The greater your financial obligations and the more dependents you have, the more life insurance you may need to protect your assets and your family’s financial security. Obligations which may need to be considered are your repaying your mortgage, paying for your children’s future education, settlement of personal debts, medical expenses, funeral expenses and a lump sum to meet your family’s future living expenses.

How much cover is enough?

Everyone’s situation is different, the level of Term life and TPD insurance cover required will vary depending on your requirements. In general the cover should be sufficient to allow repayment of debt and other one off expenses and provide a lump sum to be invested that will meet the ongoing income needs of any beneficiaries of the policy. Please find attached a calculator which you can use as a guide to help you consider what level of cover may be appropriate to your own needs.

It is best to talk to a qualified risk adviser such as Care4Wealth who has the experience and expertise to guide you in choosing the right amount of cover for your needs, the right policy for your particular situation and budget and who should own the policy. Life and TPD insurance premiums vary depending on age and health history. The premium rates are determined by factors such as: amount of cover sought, age, sex, health, occupation and smoking habits.

Other information on TPD

TPD provides a lump sum if you suffer an illness or injury that leaves you totally and permanently disabled. TPD insurance benefits are often used to eliminate debts, pay for medical expenses or fund any permanent lifestyle changes resulting from disablement.

TPD products vary in their definitions of what ‘totally and permanently disabled’ means. It is important to do your research and to speak to a financial adviser to be sure you have a product that allows you to claim under one of the following four definitions:

1. Unlikely to ever work in your ‘own’ or ‘any’ occupation again.

2. Permanently unable to perform two of the following ‘Activities of Daily Living’ without someone else’s physical help:

  • bathing and showering
  • dressing and undressing
  • eating and drinking
  • maintaining continence
  • getting in and out of bed (or a chair or wheelchair).

3. Loss of sight or use of limbs.

4. Suffer significant cognitive impairment (dementia-type illnesses).

What is the difference between an ‘own’ or ‘any’ occupation definition?

Most companies allow you to choose whether you want coverage against being unlikely to be able to work in your ‘own’ occupation or in ‘any’ other occupation again, after suffering an illness or injury.

For example, a surgeon who injures her hands in a car accident may not be eligible for benefits under an ‘any’ occupation definition, as she may still qualified (and able) to work as a general practitioner.

However, if the surgeon has an ‘own’ occupation policy, she may be eligible to claim, as she is unlikely to ever work as a surgeon again. ‘Own’ occupation TPD provides a greater level of coverage. Your financial adviser will be able to help you choose the best definition for your personal circumstances.

Estate Planning

Estate planning is all about giving you proper control of your assets, making sure that the right amount of money and assets go to the right person(s) at the right time. It is about wealth succession.  When reviewing your insurances you should also review your will to ensure it is up to date and reflects your intentions….  more information.

The information contained in this website has been prepared for general information purposes only and not as specific advice to any particular person.  Any advice contained in this website is General Advice only and does not take into account any person’s investment objectives, financial situation and particular needs.  Before making any investment decision based on this advice, you should consider, with or without the assistance of a financial adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances.  A Product Disclosure Statement on any financial product mentioned in this presentation should also be obtained and read prior to proceeding.