Life insurance is often something people intend to review "one day", but for many Australians it is one of the most important financial protections they can have in place.
Insurance is not just for families with young children. In reality, it is suitable for almost anyone who relies on their ability to earn an income, has a mortgage or other debt, supports dependants, or simply wants peace of mind that their financial position is protected if the unexpected occurs.
As our circumstances change throughout life, our insurance needs often change too. A young professional may need Income Protection to safeguard their earnings, while a family with a mortgage may require higher levels of Life and Total & Permanent Disability (TPD) insurance to ensure debts can be repaid and loved ones are financially secure. As retirement approaches, insurance can continue to play an important role in protecting accumulated wealth and providing certainty during major life events.
Understanding the Different Types of Insurance
Life Insurance
Life Insurance pays a lump sum benefit if you pass away or are diagnosed with a terminal illness. It is generally designed to help your family maintain their lifestyle, repay debts, cover education costs, or provide ongoing financial support when it is needed most.
Total & Permanent Disability (TPD) Insurance
TPD Insurance provides a lump sum payment if you become permanently disabled and are unable to return to work. The funds can be used to repay debt, cover medical expenses, modify a home, fund ongoing care, or provide financial security when earning capacity has been lost.
Trauma Insurance
Trauma Insurance provides a lump sum payment following the diagnosis of a serious medical condition such as cancer, heart attack or stroke. The benefit gives you financial flexibility during recovery and can help cover treatment costs, rehabilitation expenses, time off work, or other lifestyle needs.
Income Protection Insurance
Income Protection replaces a portion of your income if illness or injury prevents you from working. For many people, their ability to generate an income is their most valuable asset. Income Protection can assist with meeting everyday living expenses while you focus on recovery.
Our Advice Process
At hmh, insurance advice is tailored to your individual circumstances and objectives.
Our process generally involves:
- Fact Find – Understanding your financial position, family circumstances, assets, liabilities, income and existing insurance arrangements.
- Insurance Risk Analysis – Identifying potential financial risks and calculating appropriate levels of cover based on your needs and objectives.
- Research and Quotes – Comparing policies, definitions, features, insurer quality and premiums across the market.
- Statement of Advice (SoA) – Presenting personalised recommendations and explaining why the proposed strategy is appropriate for your circumstances.
This process helps ensure clients receive advice that is appropriate, cost-effective and aligned with their goals.
A Recent Client Success Story
One recent example highlights the value that appropriate insurance can provide.
HMH recently assisted a client through a particularly complex TPD claim process. The claim involved extensive documentation, ongoing communication with multiple parties (including the Insurer and medical professionals) and a lengthy assessment process.
Following a successful outcome, the client received a TPD benefit exceeding $2.2 million.
The proceeds allowed the client to significantly reduce debt, improve their retirement position and gain confidence that their long-term financial needs would be met. Most importantly, it provided peace of mind during what had been an extremely difficult period in their life.
While nobody takes out insurance hoping to suffer ill-health, outcomes such as this reinforce why having appropriate cover in place can make a life-changing difference when the unexpected occurs.
Final Thoughts
Insurance is ultimately about protecting what matters most. Whether you are building wealth, raising a family, running a business or preparing for retirement, having the right insurance strategy in place can provide valuable financial security and peace of mind.
If you aren’t insured or it has been some time since you reviewed your cover, or your circumstances have changed, it may be worth assessing whether your existing arrangements are still appropriate for your needs.
Talk to our team of Financial Advisers about how we can help you ensure you are covered if the unexpected occurs.
By David Silver, Financial Adviser
This article provides general educational information only. The content does not consider your personal objectives, financial situation or needs.