Why personal insurance is essential for financial security

If you’ve spent time working on your financial plan lately, you might have looked at your investments, your strategies for income growth and perhaps your savings goals.

But have you thought about your financial protection?

Personal insurance cover acts as a safety net, making sure that you can achieve the financial goals that you set yourself – and that you can’t be knocked off course financially by something unexpected.

Here is a rundown of the things you might need to know.

What is personal insurance, anyway?

Personal insurance is insurance that covers you. You might insure your car or your house with general insurance, but personal insurance is cover for your financial life.

There are a few main types of personal insurance:

Health insurance: Health insurance can help to cover the costs of accessing healthcare. There are lots of different types of health insurance, but it is often used by people who want to access private healthcare options. There are also policies that can help with the cost of more “day to day” expenses.

Life insurance: Life insurance pays out a lump sum when a person dies. If you have people who depend on you financially, this could be a blessing for them if something were to happen to you. The policy payout can be used for things like paying debt, to help cover day to day bills that your income would have covered or to can be put aside to help pay for things that you’d want to support if you were alive.

Income protection insurance: If you were not able to work due to illness, it’s likely that you and your family, if you have one, would still have bills to pay. Income protection insurance can be a way to help with this. It steps in to help keep a flow of income coming into your household. There are other options, such as rent and mortgage cover, which can be used to cover your housing costs.

Total and permanent disability cover: TPD insurance pays out a lump sum when someone becomes totally disabled and will not be able to ever work again. You or your loved ones could use this any way you need to, from meeting debt or bill payments, paying for treatment costs or covering expenses incurred to accommodate your disability.

Trauma: Trauma insurance pays out a lump sum when the insured suffers a  specified health condition, including serious cancers, heart attacks, deadness, or blindness. The lump sum payment can help with extra medical costs that you incur during this time, or other costs of keeping the household afloat.

Why does it matter?

The peace-of-mind that personal insurance offers can really be invaluable.

Health insurance means you won’t have to worry about an unexpected medical expense. Life insurance means that your family will be financially provided for if you’re no longer around to earn an income. Income protection cover means that, even if your health results in you not being able to work for a while, your bills will still be paid.

Without this protection, there is a risk that all the hard work that you put into building your financial life could be damaged by something that is out of your control.

Want to talk?

Is it time to check that you have adequate personal insurance protection? We can help you look at the options available and determine what might be appropriate to protect you, your family, and any financial goals that you are striving for.  The safety net is available – let us help you make use of it.


Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.

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