Safeguarding Your Financial Future - Navigating Insurance
In this blog, we'll explore the world of insurance – a vital component of your financial strategy. As financial advisors, we're here to provide clarity on the types of insurance you need, explain why insurance is crucial, and shed light on the impact the right coverage can have on your family's future.
What Kinds of Insurance Do I Need?
Australia offers a range of insurance options to protect you and your loved ones from unexpected financial challenges. Here are some essential types of insurance to consider:
Life Insurance
Life is unpredictable, and life insurance provides a safety net for your family in the event of your passing. It ensures your loved ones are financially supported and can maintain their quality of life.
Private Health Insurance
Private health insurance offers access to quality healthcare services and helps cover medical expenses not covered by Medicare. It provides greater control over your healthcare choices and reduces wait times for treatments.
Total and Permanent Disability (TPD) Insurance
TPD insurance provides financial support if you become permanently disabled and are unable to work. It helps cover medical expenses, modifications to your home, and ongoing living costs.
Trauma Benefits Insurance
Also known as critical illness insurance, this coverage provides a lump sum payment if you're diagnosed with a critical illness specified in the policy. It eases financial burdens during recovery.
Income Protection Insurance
Income protection ensures you receive a portion of your income if you're unable to work due to illness or injury. It safeguards your financial stability while you recover.
The risk of being underinsured
Unfortunately, many Australians only find out they are underinsured when it seems too late – at the time they need to make a claim.
Financial advisors are required to review their clients’ financial plans as part of the ‘six step financial planning process’ as outlined by the Financial Planning Association of Australia. If they don’t, it can end up leaving you significantly out of pocket when crisis hits.
For example, you receive a pay rise and your financial advisor does not increase your income protection insurance to reflect your new income. Say the income protection payments you’re covered for remain at $3,000 a month, while your pay has increased to $5,000 a month. It’s a significant blow if you need to claim these monthly benefits.
Another common example is if you start a family or buy a house, but you do not increase your life insurance to reflect this. In the event your family needs to make a claim, this can again result in your insurance payments not covering living expenses; causing financial stress on top of everything else your family is already going through.
That is why having a dedicated Financial Advisor to support you and meet with you regularly, they are able to ensure that you are getting the most out of your insurance, and that it’s the right insurance to cover you if the worst ever happens.
Why Is Insurance Important?
Insurance is like a safety net that cushions you and your loved ones against the uncertainties of life.
Here's why insurance is crucial:
Financial Security
Insurance provides a financial buffer when unexpected events occur. It prevents you from depleting your savings or going into debt to cover medical bills, disability-related costs, or loss of income.
Peace of Mind
Knowing that you have adequate insurance coverage gives you peace of mind. You can focus on living your life without constant worry about how you'll manage financially during challenging times.
Protecting Your Loved Ones
Insurance ensures your family's financial stability even if you're no longer around to provide for them. It's a way of safeguarding their future and providing for their needs.
What Impact Can the Right Insurance Have on My Family's Future?
The right insurance coverage can have a profound impact on your family's future, offering security, stability, and the freedom to pursue their dreams.
Consider these scenarios:
Unforeseen Tragedy
If the unexpected happens and you pass away, life insurance ensures that your family can maintain their lifestyle, cover mortgage payments, and continue education plans.
Disability
TPD and income protection insurance can provide the financial means to adapt to a new way of life if you experience a permanent disability. It covers medical expenses and modifications to your living environment.
Critical Illness
Trauma benefits insurance can ease the financial burden of medical treatments and lifestyle adjustments when facing a critical illness. It allows you to focus on recovery without financial stress.
Insurance is a powerful tool that offers financial security, peace of mind, and protection for your loved ones. As financial advisors, we're here to guide you through the process of selecting the right insurance coverage for your unique circumstances.
At Strategem Financial Services, we understand the importance of safeguarding your financial future. Contact us at (03) 5445 4666 to explore insurance options that align with your goals and priorities.
Secure your family's future with the right insurance coverage. Reach out to us for a consultation.
We are here to help
If you need further advice on this topic, please do not hesitate to contact our office on (03) 5445 4777 and one of our Accountants will be available to support you