Three Personal Insurance Types Everyone Needs
Carrying insurance is not something that is meant only for business, cars, or other items you own. Insurance coverage can also help protect you, the individual, your family, and others from different types of hardship that is caused by an unforeseen nature. Here you will find this type of insurance is often called personal or individual insurance. This can even be broken down more and classified into various categories depending on the needs of the person. Listed below personal insurance information in various types.
In this form of insurance, which can also be called death or life coverage, it is meant to cover in cause you die. This insurance will provide the family with some stability financially while they are burying you. The money from this insurance is usually paid out in a lump sum amount. Since this insurance is so useful, it is very sad that most of the life insurance that is held by 60% of Australians who have children is not enough to provide support for the children for more than a year after their death. This information is based on stats from the Australian Investment and Financial Services Association.
Life insurance may cover and sever to protect several different financial aspects of the family:
- removal of all the debt that may cripple the family’s ability to live.
- help the surviving members of the family to live on the money that is provided.
- cushions the family from the medical, funeral, and even legal costs of associated with death.
- ability to get wealth sent to beneficiaries.
Permanent and Total Disability Insurance
Becoming disabled is something no one wants to have happen. However, it can happen and you have a couple of options available when this does happen. One is the government disability pension or a payout from a total and permanent disability insurance plan you have. The first option, the government pension, is typically not going to help you keep your standard of living, like you would with the insurance plan. A good example comes from the Australian Bureau of Statistics which shows that a normal adult in 2011 would earn 1,288.10 per week; where the disability pension for a disabled spouse, with children, was only $670.90 each fortnight.
With the insurance plan, you can get a lump sum payment, if you are not capable of working anymore due to illness or injury. With this payment you are guaranteed to be secure financially, since the injury or illness almost always requires medical care, which cost a fortune. Something else is this type of personal insurance will cover the living expenses most people have.
Income Protection Insurance
Keeping a steady flow of money coming in is a great thing to have. However, your income can be interrupted at times by an unexpected interruption. This is much like having insurance on your vehicle in the event of an accident. However, only 31% of the working Australian population has this insurance, compared to 85% who carry vehicle insurance.
The income protection plans cover you from a variety of items that prevent you from working such as illness, injury, or other issues that come up. Most of the time this insurance, when these events happen will pay 75% of your monthly income, for the time stated in the plan or until you are back wokring. Since you may be out of commission for an indefinite period, you will have these monthly benefits to help pay for all the regular bills each month, while you heal.
Each of these insurance forms help your family and yourself with any financial burdens that come up from unexpected events. Ultimately you get to rest easier financially, no matter what is going on.
Video – Definition of Insurance Proceeds : Personal Finance Information