It’s easy to be wise after the event – taking out personal insurance is being wise before it. What happens if you have a bad accident and need extended time off work, or are left permanently disabled? The more you have, the more there is to lose. Here are four types of cover worth considering.
1. Life insurance
Life insurance protects your family should the worst happen to you, paying a tax-free lump sum or annuity to your nominated beneficiaries. It helps loved ones maintain their standard of living, cover the mortgage or rent, and meet other expenses – and can even fund a pension if your retirement plans aren’t on track.
2. Long-term disability insurance
If you’re rendered temporarily or permanently disabled, it’s not just care costs but lost income to think about. Disability insurance provides a monthly payment to compensate for part of the lost income. Business owners can also look at business overhead expense (BOE) cover, which covers business expenses such as rent, utilities and salaries.
3. Critical illness (trauma) insurance
Trauma insurance provides a lump sum if you’re diagnosed with a serious condition such as cancer, stroke or a heart condition. It goes over and above medical costs, providing funds for other expenses during illness or recovery – including funding lost income if your spouse stops work to care for you.
4. Key person insurance
For business owners, what would happen if a key employee, partner or director suffered a major illness, injury or death? Key person insurance offsets the costs (hiring a temporary replacement, recruiting a successor) and losses a business may experience when a key person departs.
It only takes one serious event to knock you back financially. Whatever stage of life you’re at, it makes sense to take precautions. Read the fine print before signing up – and if the many providers and options feel baffling, get in touch and we’ll be happy to help.