What are the risks?

For most people, the major risk is loss of income – either permanently or in the short term. Without an income you will find it difficult to meet your living expenses, repay debt or create wealth.

What would happen if you could not earn an income for six months or a year? Could you draw from personal savings or would you need to turn to your family for assistance? Would you be eligible for social security or workers compensation benefits? Or do you have appropriate personal insurances in place?

Permanent disablement would mean a total loss of income and is likely to require lump sum insurance to provide the funds to pay off debt, to restructure your affairs and to provide a future income. Death would require similar amounts to ensure your family are supported.

It’s not just about you

Your death, sickness or injury will have a serious impact on those who are closest to you. How will they manage if you are unable to earn an income to support your family? 

What happens if you are insured but your insurance benefit is tied up in your superannuation fund and is not available to assist you when you need it most?

If you are in business with another, how would the business cope with the death, sickness or injury of your partner? How would you buy out your partner’s interest in the business if they could no longer participate?

Act now

When you apply for life insurance you will be asked various questions about your lifestyle, your health, your medical history and the medical history of your parents. Based on the responses you may also have to undergo a range of medical tests. 

The older you get the more likely you are to have a medical issue as a result of lifestyle, sporting injuries or work injuries.  The longer you delay the more likely it will be that the personal insurance you need will come with “exclusions” and/or increased premiums or it simply will not be available at all.

September 2010