Main types of personal insurance?

1. Life insurance,
2. Total and Permanent Disability Insurance (TDP),
3. Critical illness insurance and
4. Income Protection Insurance

Each insurance type has unique features and benefits, but all are designed to give you peace of mind and security.

Life insurance is designed to provide you and your family with a lump sum payout if you die or suffer a terminal illness when you hold a valid policy. You and your dependents can use the funds however they see fit. The lump sum can be used to cover:

1. Funeral expenses
2. Mortgage repayments and other financial obligations
3. Estate planning needs
4. Extra expenses needed by your loved ones
5. A financial nest egg for your spouse to give options about the need for work.

Total Permanent Disability (TPD) insurance provides a lump sum payment to cover the associated costs incurred if you have been permanently disabled due to a severe illness or accident and it’s unlikely you will be able to work again. This lump sum can be used to:

1. Pay for medical expenses
2. Pay for your rehabilitation costs
3. Cover fees on hiring a nurse/housekeeper
4. Adapt your home and car if required
5. Help with day-to-day living expenses.

Total and Permanent Disability insurance offers financial options after a life-changing event, reducing stress and giving you peace of mind knowing there is financial backup despite your new condition.

Income protection insurance can pay you a percentage of your income (usually up to 75%) if you suffer an accident or illness, causing you to be temporarily unable to perform your usual work. Subject to the terms and conditions of the policy, the benefit is generally paid monthly until you can resume work. Income protection insurance premiums are often tax-deductible, but once a claim is made and benefits are paid to you, those payments will be treated like regular income for tax purposes. Income protection payments can be used as required, such as for:

1. Your daily expenses,
2. Rental and maintenance costs
3. Mortgage and other debts.

Critical Illness Insurance provides a lump sum if you are diagnosed with a traumatic medical event listed in your policy, including but not limited to heart disease or cancer. This insurance may also be called trauma insurance and can help when facing challenging medical situations by providing an alternative funding source to your financial commitments. This allows you to focus on returning to full health. A word of warning, however, is that the medical definitions and insured medical events may differ between policies. Before purchasing, you must clarify what is included and excluded in your chosen policy. Critical illness insurance payouts can be used to :

1. Cover your medical expenses
2. Purchase medical equipment to aid your recovery
3. Pay rehabilitation costs
4. Cover the hire fees of a nurse/housekeeper
5. Fund home modifications
6. Provide funds for a holiday for you and your family to recuperate

See Blue Summit Financial Solutions today to discuss your insurance needs.

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