Protection – the key to financial peace of mind

As we juggle the financial needs of today against tomorrow, we also need to remind ourselves of the importance of protecting our most valued asset – ourselves and our ability to earn an income.

Sobering research shows us how frequently this type of insurance can be needed. Before we reach the age of 65, one in three of us will suffer a critical illness (1), and ill health will force one in two people off work for more than 30 days (2).

Taking out life, total and permanent disability and trauma insurance isn’t something we want to think about, however as the research shows, it has a significant role in ensuring financial peace of mind.

If you fall sick or have an accident that affects your ability to earn an income, you want to avoid diminishing the funds that you have worked so hard to earn, nor do you want your family’s lifestyle to suffer.

But how much cover do you need? That depends on your age and your family situation.

As a starting point, take stock of your long-term debts and estimate your annual living expenses. Consider the number of years you may require cover should circumstances arise where you need it.

Take the time to estimate how much this totals and consider how you would cover this if you don’t have insurance cover. These estimates will not take into account inflation or other expenses that may arise.

While you can calculate some figures at home, the importance of getting this right often calls for professional and trusted advice.

A financial adviser will help you identify and estimate these costs as accurately as possible so you can be confident that you are not over or under-insured.

The type and amount of insurance needed will depend on your personal financial circumstances and goals, your lifestyle, how many dependants you have and your age. This will change over time, so it’s important to review to keep it relevant.

These risk-based insurances are really something we can’t afford to be without if we want financial peace of mind. As a first step, contact us at Beyond Bank to discuss your needs and the solutions and wider advice we can offer.

(1) 1995 Disability Committee Report (the probability that an insured 35yo, white collar, Class life will be disabled beyond a 30-day waiting period due to accident or sickness before 65)
(2) Gratton Critical Illness Paper (1994) (Aggregate/35 male/female/smoker/non-smoker)