Personal lnsurance: When it's important to be covered

When someone mentions personal insurance whether that be life insurance, total & permanent disability insurance (TPD), critical illness (trauma) insurance or income protection insurance many will run for the hills as the perception of many is that personal insurance is a waste of money and if I did have a claim, it would not be paid.

The truth of the matter is that insurances are an important pillar of your financial wellbeing and that most legitimate claims are paid.

Insurance has a purpose and that purpose is to simply provide you, your partner and your family with financial protection should you suffer an injury or illness that resulted in a fatality, a permanent disability or a terminal illness. A severe health issue or even a diagnosis of a illness can have significant financial impact on you and your family. You can go from a situation where you and your family are comfortable to struggling. The questions that you need to be asking yourself include:

If I can no longer work because of health issues, can I maintain mortgage repayments and cover the day to day bills and costs that I currently incur? If yes, for how long?

How can I afford to repay any debts? Do I have to sell assets to be able to repay debts?

If I were to pass away, what does the financial position of my family look like? Are they able to maintain current lifestyle? Are the children able to continue to attend the same schools? Will my partner have enough assets to be comfortable in retirement?

If I were to become totally and permanently disabled, how do we repay the debt, how do we cover the mortgage repayments, how do we afford the additional medical attention and potential caring costs now and into the future?