Although the majority of people put their faith in things going according to plan, it’s always important to combine this faith with adequate financial planning. An individual’s financial planning strategy may include investing in stocks and shares, buying property in up-and-coming areas, or even dipping their toes into the volatile crypto market, but these relatively complex areas of investment require some modicum of expertise.
Insurance is an area pretty much everyone understands, and although it’s more of a safety net than an investment, it can and will help if ever needed. Whether it’s life insurance in the US, Income protection insurance in Australia or any other type of personal insurance, it’s an investment of sorts that you hope you’ll never need, but will be immensely grateful for if you ever do.
Insurance – Easy Entry Financial Planning
The great thing about insurance as a financial product is that virtually anyone can access it. Take income protection insurance as an example, a product that anyone in employment can take advantage of. A comprehensive policy from an accredited company will generally pay out up to 70% of a base salary if the person is unable to work as a result of sickness or injury.
There may be geographical differentials, but most income protection insurance policies will cover:
- Illness – Will pay out upon medical confirmation of physical/mental illnesses and diagnosis of infectious diseases.
- Accidents/Injuries – Covers most types of physical trauma resulting from accidents occurring in the home, workplace, or whilst traveling.
- General living expenses – Should cover day-to-day expenses, including rent/mortgage, loan repayments, school fees, household bills.
- Partial Disability – Will pay a proportional amount of salary if the claimant can only work in a reduced capacity or reduced role due to illness/injury.
Although we all retain hope and faith that we will never need to make a claim for any of the above, it is comforting to know that we have a safety net if things don’t go according to plan.
Policy Caveats That could Affect Any Claim
Although the benefits of income protection insurance are plain to see and easy to understand, there are certain scenarios where the insurance provider will refuse to pay out, including:
- Redundancy/Resignations
- Self inflicted Harm (including injuries/sickness as a result of intoxication)
- Regular Pregnancy (without complications)
- Illness/Injuries resulting from criminal activity
Depending on your provider, there may be other exclusions. Be sure to ask questions and read the small print.
Other Policy Details
Precise policy details may vary from provider to provider, but attention should be made to waiting period, benefit period and tax status. Your provider/broker will provide full details prior to application.
Final Thoughts
Although many personal insurance policies may invoke thoughts of unpleasant potential events, people who do purchase them are taking a responsible approach to financial planning for both themselves and their families. Ultimately, life is a journey of faith and by hoping for the best but preparing for the worst, we can go about our lives with a clear peace of mind.
