Insurance

Income Protection

This is also known as disability income insurance and is designed to provide an income during a disability through sickness or as a result of an accident. There are enormous choices concerning the amount of time benefits would be paid, the conditions under which benefits are available, and the time a disability must last before benefits commence. Expert advice should be taken due to all these factors, and the subtleties of definitions within the policies.

Life Insurance

Provides coverage in the event of death and, often these days, includes a terminal illness benefit for payment of part of the death benefit on the diagnosis of a terminal illness. Policies with cash value are available but most contemporary life insurance policies are written as risk only to minimise the premium. Adequate planning of the amount of risk and the appropriate ownership of the policy is essential to ensure that the right money ends up in the right hands at the right time.

With an immediate annuity the income component of the regular payment is taxed in your hands at the investor's own tax rate. The part that represents a return on capital is not taxed.

Total and Permanent Disability

This will provide a lump sum in the event of the insured being totally and permanently disabled as defined in the policies. Generally this risk is attached to a life policy although some companies now offer a free standing TPD contract. Unfortunately TPD risk is often overlooked which can be catastrophic; Total and Permanent Disability is often referred to as the living death as the individual's earning capacity is removed but the cost of living often actually increases.

Trauma

Trauma policies pay a lump sum in the event of an injury or sickness as defined in the policy. There is a wide range of product choice covering numerous events but most claims are paid for cancer and heart attacks. Expert advice is needed to ensure proper product choice and appropriate benefits.