Skilled Migrant Professionals October 2014 | Page 34

Money

Protect your
Financial Future

with good insurance cover
by Chits Nyamidzi
Authorised Representative of AMP Financial Planning

L

ife would be much easier if we knew what the future holds for us.
We would know when to save, spend or invest. In the event of a
prolonged sickness, injury, permanent disablement or even death
we would be able to adjust our lifestyle accordingly to ensure that it is
never compromised by these events.
Not knowing our tomorrow, we have two choices about how we
can protect our financial future. We can self-insure, which means we
will always need to have sufficient savings or investments that could be
converted to cash easily for the purpose of maintaining our lifestyle if
we were unable to generate current levels of incomes to fend for our
families.
The other option would be to transfer the risk to someone who will
take over the financial burden for us if any of these life events occurred.
This can be achieved by buying an insurance policy through one of many life insurance providers. I believe the main challenge each of us faces
is trying to identify which type of insurance is the most important. To
assist you with your decision, this article looks at the five main types of
life insurance covers which are; income protection, total and permanent
disability, trauma, child cover and death cover.

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www.smpmagazine.com.au | October 2014

Income Protection Cover
Income protection insurance replaces the income lost through your
inability to work due to injury or sickness. It is an important consideration for anyone who relies on their income to support your family
if you were either sick or injured and needed to take some time off
work. Income protection insurance normally covers up to a maximum
of 75% of your income although the choice is yours as to what percentage of your income you want covered as long it does not exceed
the 75% mark.
Total and Permanent Disability (TPD) Cover
Total and permanent disability insurance cover is designed to provide
financial protection in the event of a serious injury or illness that would
make it difficult or impossible for you to continue to work. If this happens and you did not have this cover, you will need to find a way to
support yourself and your family.
Total and permanent disability (TPD) insurance provides cover if you
are totally and permanently disabled in line with the TPD definition of
your cover. Most TPD policies are issued with one of two definitions,