Personal insurance is about protecting what matters most. It’s a financial safety net against death, illness or disability, and for most people it’s an essential part of a sound financial plan. Clients can access ongoing support and education to help them make informed decisions about their insurance and overall financial well-being. Comprehensive financial planning includes not only insurance but also education for both clients and advisers to ensure a clear understanding of insurance, tax, investments and budgeting within the broader context of financial planning. Developing strategies and plans gives clients confidence in dealing with life’s uncertainties.
Below, we’ve answered some of the most common questions we get asked about personal insurance.
Setting Your Goals
Setting your goals is the foundation of a secure financial future. Whether you’re planning for retirement, saving for a mortgage or growing your wealth, having clear objectives is key. A financial adviser can provide expert financial planning advice to help you identify and prioritise your goals based on your personal situation, risk tolerance and investment objectives.
A holistic financial planning approach means every aspect of your finances is considered. Your financial planner will work with you to develop a tailored financial strategy that aligns with your current situation and long-term aspirations. This includes a comprehensive financial plan that covers retirement planning, wealth creation, investment options and debt management. By understanding your cash flow and making informed financial decisions, you can move towards your goals with confidence.
In your first meeting with a financial adviser, you’ll discuss your financial situation, investment goals and risk tolerance. Your adviser will provide a financial services guide outlining their qualifications, services and commitment to acting in your best interests. With their support and guidance, you’ll develop a personal financial plan that addresses your needs, whether that’s investing in superannuation, managing your mortgage or securing your family’s future.
Financial planning is not a one-off event. As your life changes, so should your plan. Regularly reviewing and updating your strategy with your adviser ensures your plan remains relevant and effective, and you stay on track to achieve your objectives. With the right advice and commitment to your financial journey, you can create a secure future for yourself and your loved ones.
What are the different types of personal insurance?
- Life Insurance
- Pays a lump sum to your beneficiaries if you die. Life insurance can also play a role in estate planning by providing funds to help your beneficiaries manage taxes and transfer assets.
- Total and Permanent Disability (TPD) Insurance
Pays a lump sum if you are deemed totally and permanently disabled. Often bundled with life cover. - Trauma Insurance (Recovery Insurance)
Pays a lump sum if you are diagnosed with or suffer a specified medical condition, such as cancer, heart attack or stroke. - Income Protection Insurance
Replaces a portion of your income (up to 75%) if illness or injury prevents you from working. Policies allow you to choose waiting periods and benefit periods to suit your situation.
How much life insurance should I have?
A general rule of thumb is to calculate:
- Your total debts + current and future family living expenses
- Subtract existing assets and superannuation
The result will give you a guide to the amount of cover you may need. Since every family’s circumstances and priorities are different, working with a financial adviser ensures your calculations are accurate, your plans are tailored to your situation and your loved ones are protected.
How often should I review my cover?
Life changes, and so should your insurance. Review your policies when:
- Taking out a home loan
- Getting married or starting a household with a partner
- Starting a family
- Receiving an inheritance
- Approaching retirement
As savings grow and debts decline, the cover you need usually decreases, but the timing depends on your individual situation. Regularly reviewing your cover is part of dealing with changing circumstances and updating your strategies to ensure they match your current needs and goals.
How do I understand my insurance contract?
Insurance policies can be complex. The details of what’s included, and excluded, are in the Product Disclosure Statement (PDS). Make sure you read this and ask your adviser to explain anything unclear.
How do I choose the best insurance?
While life insurance is straightforward, other policies can be very different. For example:
- Definitions of illnesses may vary between insurers
- Policies can include optional extras (some useful, others not)
- TPD cover can be structured as “own occupation” or “any occupation”
- Claims processing times vary between providers
- Some policies may be better held through super, others directly. Given all this, professional financial advice ensures you get the right policy for you. Choosing the right cover is best done with the help of experienced financial advisers, who have the expertise and access to industry research and standards to help you make informed decisions.
Why does personal insurance matter for your future?
Over one-third of Australian families have no life insurance, and many others are underinsured. Being unprotected can be disastrous.
At Insight Wealth Planning, we want to give you confidence and peace of mind about your future. If you’re not sure if your current cover is enough or want to review or update your policies, now is the time to talk to us.
Get peace of mind. Contact Insight Wealth Planning today.