How much cover do I need?
Insurance cannot be considered with a “one size fits all” mentality.
Here at Veracity Wealth, we know how important it is to make sure that you and your family have exactly the right cover, to ensure your financial stability regardless of what life may throw at you.
In order to find out how much Life, Total & Permanent Disability (TPD), Trauma and Income Protection insurance you need, we complete a detailed analysis of your current personal and financial situation, major planned future expenses and anticipated retirement date.
You then need to consider what financial protection you would like for your family if you were to die, or become seriously ill or injured:
- Would you like to repay your home loan? What about any other loans (including personal loans, car loans and investment loans)?
- Would either you or your partner need some additional income to ensure they could cope financially on their own?
- Would you like the funds for an in-home carer if either of you were to become permanently disabled?
- Would you want a lump sum to allow each of you time off work should your partner die or become permanently disabled?
- Would you want to replace your missed superannuation guarantee payments if you were unable to work, so that your retirement life is not affected?
- Most Income Protection policies cover a maximum of 75% of your salary – can you cope without the additional 25%?
- Do you need a lump sum payment for a major expense, such as your children’s private school education?
- How much would you require for potential medical and rehabilitation costs?
- Would you like a lump sum to cover funeral and estate costs, so this does not fall to your surviving family members?
- Should you cover your young children, so that you have a lump sum payment for medical expenses and for you to take some time off work to be with them while they are sick?
- Do you have any assets you would be willing to sell to help your family financially, if something were to happen to you or your partner?
Additional considerations are:
- Should the cover be held inside or outside super? What are the tax implications of each option? When are you able to access a benefit when it is paid inside super?
- What type of TPD “definition” should you choose – “Any” or “Own” occupation?
- Should you select the cheaper Stepped premiums, or pay more for Level premiums in the short term, in order to reap the long term discounts?
- Should you link any of these covers, to reduce the cost? What are the implications of this?
- Do you need the “Premium” cover, or is the standard cover suitable for your situation?
- Who should be the owner of your policy?
- How long can you afford to wait before you start receiving income payments from an Income Protection policy?
- How many years would you like to receive the income payments for?
- Should you be considering any Optional Benefits such as Re-instatement and Buy Back, Increasing Claim and Accidental Injury?
If you have personal insurance cover and haven’t discussed these things, the chances are that you aren’t covered adequately and that your family could face significant financial hardship if something were to happen to you.
At Veracity Wealth Planning, we have customised an “Insurance Needs Analysis” which we undertake with all our clients. We use your personal details to form a recommendation of the levels of cover you need to protect your family. Meet our Team.
We also have access to an insurance review software system which allows us to enter your details and insurance requirements, and review the insurance options available. The software provides premiums comparisons as well as policy quality ratings, and ensures that we have all the information we need to provide the best recommendations to you. Read more about us.
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Why is insurance important?