When it comes to protecting yourself and your loved ones, personal insurance is an important investment to consider but is often left unattended. Navigating the complex world of insurance can be overwhelming, which is why seeking professional advice can be highly beneficial. As a financial advisor based in Coffs Harbour, Gretel Financial understands the importance of making informed decisions about personal insurance.
One of the first decisions you’ll need to make when purchasing personal insurance is whether to pay for it inside or outside of your superannuation. While it may be tempting to use your super to pay for insurance, it’s important to understand that there are limitations and restrictions to doing so. For example, the amount of cover you can get through your super may be capped, and your beneficiaries may not receive the full benefit if you were to pass away.
Another important type of personal insurance to consider is Income Protection. This type of insurance provides a regular income if you’re unable to work due to illness or injury. While you can purchase Income Protection through your superannuation, there are benefits to doing so outside of your super. For example, Income Protection outside of super typically provides more comprehensive cover, including coverage for mental health conditions and a broader range of injuries and illnesses. Purchasing Income Protection outside of your super, you can ensure that your premiums are tax-deductible, which can help to reduce your overall tax bill each financial year. A financial advisor can help you understand the differences between Income Protection inside and outside of your super and recommend what is best for you.
Linking life and TPD (Total and Permanent Disability) insurance is another important consideration when it comes to personal insurance. Life insurance provides a lump sum payment to your beneficiaries if you were to pass away, while TPD insurance provides a lump sum payment if you were to become permanently disabled and unable to work again.
By linking these two types of insurance, you can ensure that you’re fully protected in the event of an unexpected tragedy. For example, if you were to become permanently disabled and unable to work, your TPD insurance could provide a lump sum payment to cover medical expenses and ongoing care. At the same time, your life insurance could provide a lump sum payment to your beneficiaries to help cover expenses and provide financial security in the event of your passing.
It is important to note that personal insurances should be reviewed annually to ensure you are covered correctly. Your asset and debt levels are likely to change and you may have more or less dependents on your hands. All of these factors work to ensure you have the correct amount of cover and are not over paying on your insurance premiums.
Seeking professional advice when purchasing personal insurance can provide numerous benefits. At Gretel Financial, we understand the complexities of the insurance world and can provide the guidance you need to make informed decisions about your coverage. Contact us today to learn more.
Book now for a free consultation and lets get you covered.
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