Insurance: EVERYTHING you need to know about income protection, TPD & life insurance
Mar 19, 2024
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Deep dive into personal insurances: income protection, TPD, and life insurance with financial advisers. Discusses the risks of being underinsured, navigating insurance options in super funds, adjusting coverage, rising costs as you age, estate planning, and choosing the right benefit period for income protection. Also covers wealth management services and the importance of insurance in safeguarding assets and making sound financial decisions.
Different types of insurance serve specific purposes like providing financial support in cases of disability or critical illness.
Accurate disclosure of medical history is crucial to avoid claim denials and ensure smooth processing of benefits.
Regular reviews of insurance policies are essential to adjust coverage levels based on changing needs and circumstances.
Insurance premiums tend to increase with age, requiring reassessment of coverage to balance adequate protection with limited resources.
Deep dives
Insurance Types and Benefits
There are four main types of insurance policies discussed in the podcast: life insurance, total permanent disability (TPD) cover, income protection, and trauma cover. Each type of insurance serves a specific purpose, such as providing financial support in case of death, disability, inability to work, or critical illness. For example, trauma cover pays a lump sum for critical illnesses like cancer or heart attacks. Understanding the nuances and benefits of each insurance type is crucial for comprehensive coverage.
Insurance Within Superannuation
Many superannuation funds offer default insurance cover to their members, with basic levels of life insurance, TPD, and income protection included. However, the default cover may not always be sufficient to meet individual needs, as the maximum coverage levels are often low. Increasing the insurance cover within superannuation may involve additional costs and may require a thorough understanding of the terms, conditions, and implications of the policy. It can be advantageous in terms of tax deductions but may have limitations when it comes to claiming.
Importance of Disclosure in Insurance Policies
Accurate disclosure of medical history and other relevant information is crucial when obtaining insurance within or outside of superannuation. Failure to provide truthful information during the underwriting process can lead to claim denials in the future. Understanding the impact of pre-existing conditions on insurance coverage is essential to ensure that claims are processed smoothly and benefits are paid out as expected. Consulting with a financial advisor can help navigate the complexities of insurance policies and ensure proper disclosure.
Claim Process and Insurance Coverage Evaluation
During critical life events like diagnosis of illnesses or disability, proper insurance coverage can provide essential financial support. Understanding the claim process, policy inclusions, exclusions, and limitations is key to successfully receiving benefits when needed. Financial advisors play a vital role in evaluating insurance coverage, assisting with claim submissions, and advocating for clients to maximize their insurance benefits during challenging times. Regular reviews of insurance policies can help adjust coverage levels based on changing needs and circumstances.
The Consequences of Aging on Insurance Premiums
As individuals age, insurance premiums tend to increase due to the higher statistical risk of developing illnesses or injuries. This can lead to challenges for those in their 50s or 60s as premiums become a significant proportion of income or savings, especially if financial resources are limited.
Adjusting Insurance Needs with Age
As individuals enter their 50s and 60s, it becomes essential to reassess insurance coverage and reset expectations. Factors such as mortgages, low super balances, and financial responsibilities influence the decision-making process. Balancing the need for adequate coverage with managing limited financial resources is crucial.
Considerations for Premium Paying
Choosing the appropriate mix of insurance terms, such as level of cover, waiting periods, and benefit periods, impacts the costs of insurance premiums. Adjusting these factors based on age, financial stability, and risk tolerance can help optimize coverage and costs of insurance plans.
Insurance for 80 mins? If you can make it through this episode, you can do anything in life.
Owen Rask is joined by financial advisers, Phil Thompson from SkyeWealth, and Jame's O'Reilly from NortheastWealth, on this special deep dive episode into personal insurances: incomeprotection, life insurance, and TPD/disability.
This episode is EPIC and is an amazing primer for how to get and keep insurance.
DISCLAIMER: This podcast contains general financial information only. That means the information does not take into account your objectives, financial situation, or needs. Because of that, you should consider if the information is appropriate to you and your needs, before acting on it. If you’re confused about what that means or what your needs are, you should always consult a licensed and trusted financial planner. Unfortunately, we cannot guarantee the accuracy of the information in this podcast, including any financial, taxation, and/or legal information. Remember, past performance is not a reliable indicator of future performance. The Rask Group is NOT a qualified tax accountant, financial (tax) adviser, or financial adviser.
