Life's unexpected twists

Are you prepared for life's unexpected plot twists?

It's impossible to know what's on the horizon, but with the right personal insurance, at least you can be financially prepared against life's curve balls. So how do you know which types of cover are right for you? Here are some personal insurance basics to get you started on the road to financial protection.

Life Insurance

Think of life insurance as a financial safety net for your loved ones. With the right cover in place, your beneficiaries will receive a lump sum payment in the event of your death, so they can keep up with regular expenses, cover any debts and put aside money for the future. If you're diagnosed with a terminal illness, your insurer may also agree to pay out your insurance early.

The level of cover you need depends on the debts you would leave behind (such as a mortgage) and how much your beneficiaries would need to keep up with their ongoing expenses without your income to rely on.

Income Protection

If your regular earnings suddenly stopped, how long could you manage financially – and what would you have to give up?

Income protection insurance regularly pays part of your usual income if you're unable to work for an extended period due to illness or injury. You can adjust the cost and value of your cover by customising the waiting period, benefit payment period and the portion of your income you want to insure.

Trauma Insurance

Serious health conditions such as cancer, heart attack, stroke or blindness impact the lives of millions of Australians. Trauma insurance helps cover the costs of treatment and rehabilitation in the event of a critical illness, with a lump sum paid if you're diagnosed with one of the conditions specified in your policy.

TPD Insurance

Being faced with a permanent disability can have a far-reaching impact on your lifestyle. With Total and Permanent Disablement (TPD) insurance, you can receive a lump sum to help cover any immediate costs and also your ongoing living expenses if you become disabled and can no longer work.

TPD insurance can either be standalone or attached to a life insurance policy. The cost of your cover may depend on whether you choose an own occupation policy, which provides a benefit if you can no longer work in your usual job - or an any occupation policy, which generally provides a benefit if you can no longer work in any job that you're qualified for by education, training or experience.

Premium costs: stepped or level?

With life, trauma and TPD insurance, you may also be able to choose how you want to pay for your premiums:"

  • Stepped premiums - these are calculated based on your age, with the premium cost generally increasing as you get older. Low entry prices make this an affordable option in the short term.
  • Level premiums - you pay more at the start but the premium costs average out over time, meaning you can save money in the long term. In many cases, a level premium converts to a stepped premium when you turn 65, reflecting the increase in health risk for older Australians.
Super cover versus policy cover

Most super funds offer life insurance, plus TPD and income protection cover, with premiums paid straight from your super balance. While this cover is easy to manage and means you don't have to cover the premium costs out of your own pocket, it means your super won't be able to grow as quickly. Also importantly, the cover your fund offers might not be sufficient for your needs. In this case, you may be able to take out a separate policy outside super to cover the shortfall.

Tailored to fit

Everyone's needs are different and it can be difficult to know which cover options are right for you. However, your Financial Adviser can help you find the right mix of insurance options for your situation and life stage.

Contact our Financial Planning team to discuss the best cover for you. Ph 03 8850 3333 or email obrien@obbc.com.au.

Office

Suite 2

50 Upper Heidelberg Rd

Ivanhoe VIC 3079

Postal

PO Box 500

Ivanhoe VIC 3079

Phone

03 8850 3333

Fax

03 8850 3330