Strategic Wealth will work closely with you to establish your insurance needs, engaging insurance experts as required, ensuring you get the appropriate level of cover for your situation. The four key insurance products to consider include:
Income Protection Insurance
Income protection insurance, also known as salary continuance, is designed to provide a regular income in the event you are unable to work due to sickness or injury. Generally, it provides coverage up to a pre-determined and agreed benefit period and can pay up to 75% of your income.
There are many aspects to consider including where to own the policy, selecting a waiting period and a benefit payment period, and deciding if a level of stepped premium works best for you.
Life insurance is critical to securing your financial future. Its benefit can be used to help with the repayment of debts, covering future needs like the cost of children’s education or long-term care, providing funds for investment to generate an income, or to keep your business afloat. It can be owned inside and outside of your superannuation fund and each option has tax and other considerations.
Total and Permanent Disability Insurance
Total and Permanent Disability (TPD) insurance provides a lump sum payment should you suffer an illness or injury which totally and permanently prevents you from working again. The level of cover required for TPD may be reduced where there is already an appropriate level of income protection to ensure debt-free living.
Broadly, there are two main definitions for TPD:
- Any occupation: You can claim if you are permanently disabled and cannot work in any occupation you are suited to by education, training, or experience.
- Own occupation: You can claim if you’re unable to work in your usual occupation or your chosen field of employment.
Any occupation is often the cheaper option, however, it can be more difficult to meet the requirements of this type of disability definition.
Critical Illness Insurance
Critical illness insurance, also known as trauma insurance, provides a lump sum benefit in the event the life insured suffers a “critical condition” as defined by the insurance provider. Critical illness cover is designed to help you financially recover from a trauma or crisis, such as a heart attack, stroke, cancer or other life threatening condition. Claims are most often related to cancer and the level of cover can consider funding for specialist medical attention and access to expensive non-PBS medications. It is important insurance, particularly for non-working spouses.
For more information on Income Protection, Life, TPD and Critical Illness insurance cover see our insurance videos.
Specialised insurance cover is available for business owners and we recommend all partners in a small business consider insuring themselves as a business asset including:
- Ownership protection giving you or your estate the ‘fair value’ of the business share in the event of a serious health or life event
- Asset protection giving you and your business partners assurance that all loan guarantees are extinguished for all business related debts
- Revenue protection to ensure revenue for business continuity in the event of a health or life related event occurs to the main revenue generator.
As part of the process, a binding legal agreement should be in place so that all related parties understand what will happen if one of the business partners suffers a trigger health event.
This is a highly specialised area of insurance and Strategic Wealth can help you understand the right type and level of cover for your business.