Life Insurance
This page provides a brief outline of common types of Life Insurance that can cover many of your life risk insurance needs, both personally and for your business. There are six broad areas of risk protection provided by insurance: Life Insurance, Income Protection, Trauma Recovery, Total & Permanent Disability, Key Person and Business Expenses Insurance.
Life Cover
There are two kinds of Life Insurance Cover, Term Life Insurance and Whole of Life Insurance.
Term Life cover is usually provided under a regular premium insurance policy which provides a lump sum benefit upon your death. For an additional premium you may be able to obtain Terminal Illness Cover which provides a lump sum benefit if you are diagnosed as being Terminally Ill. Typically the regular premium for Term Life cover will increase as you get older, as the risk of you dying or contracting a terminal illness increases. However, some policies provide a “level” premium which remains fixed until you reach a specified age, say 65, after which the premiums increase annually.
Term Life policies are not savings plans. The terms and conditions applied to Term Life policies will vary between insurance companies so you should ensure that any policy offered to you is appropriate to your needs.
Income Protection
Income Protection insurance provides a regular, usually monthly, benefit if you are off work due to sickness or injury. This benefit is typically up to a percentage, say 75%, of your pre-disability income (net of business expenses but before tax) at the time of making a claim. If the insurance policy is terminated at any time the policy does not have a cash value and you will not get anything back.
Additional benefits that can be available under an Income Protection policy include:
- Total Disability Benefit
- Attempted Return to Work
- Partial Disability Benefit
- Rehabilitation Expense Benefit
- Indexation of Cover
- Waiver of Premium
- Recurring Disablement
- Leave Without Pay Benefit
- Unemployment Benefit
- Right to Automatically Upgrade
- 24 Hour Cover
- Claims Escalation
- Accident Lump Sum
- Premium Pause
Exclusions or limitations may apply to the benefits you receive under an Income Protection policy. For example the policy may not cover pre-existing illnesses or injuries and may exclude injuries caused by pregnancy or childbirth, by you personally or in other specified situations.
Income Protection policies are not savings plans. The terms and conditions applied to Income Protection Policies will vary between insurance companies so you should ensure that any policy offered to you is appropriate to your needs.
Trauma Cover
Trauma Cover pays your chosen sum insured on:
- death,
- diagnosis of terminal illness,
total and permanent disablement, or - the occurrence of one of a specified set of medical conditions or procedures.
Typically a Trauma Cover policy will cover you 24 hours a day worldwide. You can take out a policy on your own life, or insure the life of another person such as a family member or business partner.
Different insurance companies cover different events, medical conditions and procedures.
Examples of these events are:
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Note that some events, conditions and procedures may be excluded for a specified period after the commencement of cover. Trauma Cover policies are not savings plans. The terms and conditions applied to trauma policies will vary between insurance companies so you should ensure that any policy offered to you is appropriate to your needs.
Total & Permanent Disability
This form of insurance covers a total and permanent disability that stops you from ever working again. It can help you cope financially with a total and permanent disability. TPD Insurance policies are not savings plans. The terms and conditions applied to TPD policies will vary between insurance companies so you should ensure that any policy offered to you is appropriate to your needs.
Key Person Insurance
Key Person Insurance policies can provide capital or revenue to help cover the costs of replacing a specific person in a specific role in the event of that person’s death, disability or illness.
The terms and conditions applied to Key Person policies will vary between insurance companies so you should ensure that any policy offered to you is appropriate to the needs of your business.
Business Expenses Insurance
This type of insurance can help your business cope financially with your inability to earn the business an income because of sickness or injury. The terms and conditions applied to Business Expenses Insurance policies will vary between insurance companies so you should ensure that any policy offered to you is appropriate to the needs of your business.