Most commonly referred to as Term Life Cover, this type of benefit provides coverage (in the form of a cash lump sum) in the event of death or terminal illness. To ensure your debts are paid off and any dependents are cared for financially.
In the event of death, the recommended life insurance cover may assist in providing your family with a lump sum benefit to provide for the repayment of your debts and to cover family living expenses. The payment is made to a beneficiary, third party or an estate in event of your death. It would also be normal for all or part of the benefit to be paid should you be diagnosed as terminally ill.
Life cover can be provided tax effectively by a superannuation fund. When contributions to superannuation are tax deductible, eg salary sacrifice contributions, the insurance premiums are paid effectively from funds that have only been subject to contributions tax.
Total and Permanently Disabled (TPD)
This policy will pay a lump sum if you become disabled and are unable to work again. You can use this lump sum to pay off debts, cover medical costs and invest so that you have an annual income to help maintain your lifestyle. Common claims are blindness and mental illness.
The meaning of total and permanent disability can vary and is defined in each policy document. Some occupations have an option allowing you to choose the types of total and permanent disability insured. The benefit is normally provided as an advance payment of a death benefit or on a stand-alone basis. TPD insurance is often taken out to help pay for medical expenses and meet ongoing living expenses. The recommended Total and Permanent Disablement (TPD) insurance cover may also assist in providing you with funds to cover personal and business debts in the event of your Total and Permanent Disablement.
Trauma or critical illness policies pay a lump sum in the event of an injury or sickness as defined in the policy. Trauma policies are not intended to replace having private health insurance but rather are designed to ease any financial burden that will arise upon such an event occurring. There is a wide range of product choice covering numerous events but most claims are paid for cancer and heart attacks.
The list of conditions covered is often optional and varies between companies as do the definitions of those conditions. Some trauma benefits are subject to a qualifying period. The benefit can be provided as either an advance payment of a death benefit or on a stand-alone basis. This cover is also available for your children who are under the age of 18 years old.
Income protection is also known as disability income insurance and is designed to provide a replacement income if the insured person is unable to work due to a disability. This disability can be caused by either sickness or as a result of an accident.
The mistake a lot of people make is thinking that they do not require this cover as they can access work cover or sickness benefits. The maximum level of income protection you can obtain is 75% of your current salary. We strongly recommend the maximum level to ensure you are best protected in the event you cannot work.
All premiums for income protection are fully tax deductible. If you were to make a claim against the policy, all benefits received must be declared as income as they are considered taxable.
Coupling Business Expenses with Income Protection ensures your personal and work expenses are covered. Business Expenses provides a monthly payment if you are sick or injured of up to a year to help cover fixed business costs including; staff salaries, rent on your place of business or interest on borrowings. You are able to ensure 100% of allowable business expenses which would be payable on a monthly basis and ensure your business expenses continue to be paid if you are unable to work.
Are contracts between business partners or shareholders of small businesses, typically taken out as a form of business insurance. Should death, permanent injury or even divorce leave one partner remaining, buy/sell insurance covers the purchase of the remaining share of the business.
Businesses are often left to next-of-kin however they may not have the skills, time or interest to actively participate in the business. A buy/sell insurance agreement ensures that loved ones are not financially disadvantaged.
Key person insurance
(also known as key man insurance) is a form of life cover that protects your business from loss as a result of losing the services of critical individuals. How would your business survive if you died or suffered a debilitating illness or injury?
For businesses that rely on important people for their knowledge, experience, capital or client base, key person insurance is an important protection to consider.