How Personal Insurances work

TL;DR

Personal insurance provides a lump sum or regular income in the event of death, serious illness, or disability, and it's important to prioritize protecting yourself as your most valuable asset.

Transcript

hi it's olivia here from consortium private wealth um today's video is just giving you a quick overview on the different types of personal insurances that are available on the market today so in a nutshell your personal insurance provides you a lump sum on death diagnosis of a serious illness or accident or it can provide a regular income if you sh... Read More

Key Insights

• 🧑‍⚕️ Personal insurance is essential for protecting yourself and your most valued assets, such as your learning ability, lifestyle, home, and health.
• 🛟 The four main types of personal insurance are life insurance, TPD insurance, trauma insurance, and income protection.
• 🥹 Personal insurance can be held inside or outside of superannuation, depending on premium payment preferences.
• 🥰 Trauma insurance provides coverage for specific medical conditions, including heart attacks, strokes, and cancers.
• 💼 Income protection is recommended until retirement, as it replaces income in case of illness or injury.
• 😷 Underwriting is a common process when applying for insurance, involving personal and health-related questions, and sometimes a medical examination.
• 💄 It is important to contact your financial advisor when making a claim and not underestimate the significance of even minor conditions.

Questions & Answers

Q: What is the purpose of personal insurance?

Personal insurance is designed to protect your most valued assets, including your learning ability, lifestyle, home, and health, by providing financial support in the event of death, serious illness, or disability.

Q: What are the different types of personal insurance available?

The four main types of personal insurance are life insurance, total and permanent disablement insurance (TPD), trauma insurance, and income protection. Each type provides specific coverage for different scenarios.

Q: Can personal insurance be held inside or outside of superannuation?

Yes, both life insurance and TPD insurance can be held inside or outside of superannuation, depending on your preference for premium payments. Trauma insurance, however, must be held outside of super, with premiums paid from your cash flow.

Q: Should I cancel my insurance policies as I near retirement?

It is important to consult with your financial advisor before canceling any insurance policies, especially as you approach retirement. Age plays a significant role in insurance coverage and claims, so it's crucial to evaluate your specific situation and consider potential risks.

Summary & Key Takeaways

• Personal insurance provides a lump sum payment upon death, diagnosis of a serious illness, or accident, as well as regular income if unable to work.

• There are four main types of personal insurance: life insurance, total and permanent disablement insurance (TPD), trauma insurance, and income protection.

• Life insurance provides a lump sum payment upon death, TPD insurance covers total incapacitation due to injury or illness, trauma insurance provides a cash lump sum payment for specified medical conditions, and income protection replaces income in case of illness or injury.