What's your most important asset?

It's not your house or car but your ability to earn a living - and it's commonly underinsured.  

When it comes to insurance, many people adopt a ‘she’ll be right’ attitude, but looking at the statistics, there’s more chance of something going wrong than you might think.

Research has found that one in five families will be impacted by death, a serious accident or illness that leaves a parent unable to work, but 95% of families don’t have adequate levels of insurance to cover this situation.1

What types of cover are available?

Insuring yourself and your income can allow you to maintain your lifestyle and living arrangements, and give you comfort in knowing you can still meet your financial commitments—things like your home loan, rent, card repayments, bills, kids’ education fees, and treatment and rehabilitation costs should you need it.

You can buy different forms of personal insurance through your super fund or via an insurance company or an adviser. Here’s a rundown of the four main types of cover available:

  • Life insurance pays a lump sum on your death or the diagnosis of a terminal illness
  • Trauma insurance pays a lump sum on the diagnosis or occurrence of a specific illness
  • Income protection provides a replacement income of up to 75% of your regular income if you’re unable to work due to illness or injury
  • Total and permanent disability (TPD) pays a lump sum if you become disabled and are unable to ever work again.

How much is enough?

It’s important to choose the right type of insurance for your situation, which will be impacted by your personal circumstances, such as whether you have a partner or children, and the level of your debts.

It’s also important to understand how much insurance you need so you are not underinsured – nor paying for unnecessary cover.

Your financial adviser can also help determine how much cover you need. If you don’t have a financial adviser you can find one here or call us on 131 267, Monday to Friday between 8.30am and 7pm (AEST).

What else do I need to consider?

Some people believe that if they are young or healthy they don’t need life insurance. However, circumstances can change quickly, and it generally costs more to buy insurance when you’re older, so securing cover when you’re young could be a good idea.

Another common belief is that if you get sick or injured the government will pick up the bill. And while it’s true that workers’ compensation and benefit payments may apply in some cases, it’s unlikely any payments will fully replace the income lost, or cover all of your ongoing financial obligations.

If you need more information, speak to your financial adviser.
 

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© AMP Life Limited. It’s important to consider your particular circumstances and read the relevant product disclosure statement before deciding what’s right for you. This information hasn’t taken your circumstances into account. This information is provided by AMP Life Limited. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice. Although the information in this article is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decisions. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.