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Life Insurance
If you have family or friends that you would like to be taken care of
financially when you pass away, then life insurance is imperative. Upon
your death, your beneficiaries or your estate will be paid a lump sum
amount according to the sum insured. This money can be used to pay off
any outstanding debts, your mortgage, funeral costs, and can be given to
family or friends as seen fit.
Life insurance companies will base standard premiums on the following:
Age, Smoking status; and Gender. In assessing your life insurance rates,
a life insurance company may also ask for a medical assessment. This
assessment is done at the expense of the life insurance company. It is
important to note that life insurance companies who ask minimal
questions and sell life insurance without medical assessment often have
higher life insurance premiums.
Total and Permanent
Disability Insurance
Total
and Permanent Disability (TPD) insurance will provide a lump sum payment
should the person insured suffer an illness or injury which totally and
permanently prevents them from working again.
Trauma Insurance
Trauma insurance is also known as critical illness insurance and pays a
lump sum upon medical diagnosis of a serious illness such as stroke,
heart attack or cancer.
There a number of medical conditions and diseases covered by life
insurance companies in Australia. These conditions and diseases and
their definitions will vary from company to company, so it is imperative
that you read and understand the meaning of each medical condition and
what is, and is not covered by your trauma insurance policy.
Basic trauma insurance coverage:
Alzheimer’s disease, Angioplasty, Aplastic Anaemia, Benign Tumour of the
Brain or Spinal Cord, Blindness, Cancer, Cardiac arrest, Cardiomyopathy,
Chronic Kidney Failure, Chronic Liver Disease, Coma, Coronary Artery
Bypass Surgery, Deafness, Dementia, Diplegia, Encephalitis, Heart
Attack, Heart Valve Surgery, Hemiplegia, Loss of Independence, Loss of
Limbs or Sight, Loss of Speech, Major Head Trauma, Major Organ
Transplant, Medical condition requiring life support, Medically Acquired
HIV, Motor Neurone Disease, Multiple Sclerosis, Muscular Dystrophy,
Occupationally , Acquired HIV, Paraplegia, Parkinson’s Disease,
Pneumonectomy, Primary Pulmonary Hypertension, Quadriplegia, Severe
Burns, Stroke, Surgery of the aorta, Triple Vessel Coronary Artery,
Angioplasty
Extra trauma insurance coverage:
Adult insulin dependent diabetes mellitus, Burns of limited extent,
Carcinoma in situ (CIS), Chronic lymphocytic leukemia, Hydrcephalus,
Malignant melanomas, Partial blindness & deafness, Prostate tumours,
Severe endometriosis, Systematic lupus erythematosus (SLE) with lupus
nephritis.
The cost of the standard premium for trauma insurance will depend on
age, smoking status, and gender.
Income
Protection
Income protection, also known as income insurance or salary continuance,
is a policy where the insurer agrees to pay a specified amount of money
if you become ill or injured and unable to work. Income protection
insurance allows you to cover your expenses and maintain your financial
obligations as you concentrate on getting better. In the event of a
serious illness or injury, the insurer would pay a proportion of your
salary or wage (usually 75%) until you have recovered sufficiently to
work again, or up until the maximum benefit period as stated in the
policy which is normally 2 year, 5 year or up to age 65.
Once you have decided to go ahead, you need to decide how comprehensive
you want the cover to be. The more comprehensive the cover the higher
the premiums will be. These are some of the key elements in a policy and
some factors that will determine how expensive or inexpensive your
policy is:
What "waiting period" do you require, in other words how long can you be
off work before you require the income to commence. Generally the
waiting periods are range from 14, 30, 60, 90, 180, 360, up to 720 days.
The shorter the waiting period the more expensive the policy.
How long do you require the maximum monthly benefit to be? This is the
maximum length of time following the waiting period that the policy will
pay the benefit for, generally these are 2 year, 5 year and to age 65.
However if you are able to return to work because you have recovered
from your sickness or injury and are able to return to work then the
monthly benefit will cease at time.
Another key factor which insurance companies take into consideration
when looking at income protection insurance premiums to charge to their
clients is the proposed clients occupation, where the client is involved
in a hazardous occupation or where there are more risk involved they
will pay a higher premium compared to a professional office employee.
Are you a smoker? If you are or if you have smoked within the last 12
months you will pay more in premiums compared to a non-smoker. However
should you already have a policy and premium based on smokers rates and
you have not smoked in the last 12 months you may be able to have your
premiums reduced back onto non-smokers rates.
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