Life Cover

All life insurance can give you financial confidence that your family will have financial stability in your absence. Life Cover provides a lump sum benefit payable upon your death. When the benefit becomes payable, it is normally paid to your dependents or your estate. This lump sum could be used to pay back debts and/or provide a lump sum that can be drawn upon to create income, and so help your family maintain their current lifestyle. In addition, it will help you keep your families plans on track and pass on an investment asset to your family.

Some of the benefits of Life Cover are:

• Income replacement for years of lost salary
• Paying off your home mortgage
• Paying off other debts, such as car loans, credit cards, and student loans
• Providing funds for your kids’ college education

Total and Permanent Disability (TPD)

TPD insurance pays a lump sum if you become totally and permanently disabled because of illness or injury.

Each insurer has a different definition of what it means to be totally and permanently disabled. It can cover you for either:

• Your own occupation — you’re unable to work again in the job you were working in before your disability. This cover is more expensive and is usually only available outside super.
• Any occupation — you’re unable to ever work again in any job suited to your education, training or experience. This cover is cheaper but has a higher threshold to claim, so it’s less likely to pay out.

The lump sum could be used to help pay for debt reduction/elimination, income generation and all other facets of permanent disablement.

Trauma

A trauma payment is likely to be paid should you suffer any of the covered medical conditions. This could include, but is not limited to: heart attack, stroke, cancer, paraplegia, multiple sclerosis, Parkinson’s disease, chronic liver, lung and kidney disease and many more. The lump sum could be used to cover debt reduction/elimination and to cover costs related to making lifestyle adjustments, necessary home and/or car modifications, medical treatment costs, work alterations and peace of mind etc.

 

Income Protection

Income protection insurance pays part of your income if you’re unable to work. It can help pay the bills so you can focus on getting better.

What income protection insurance covers

Each income protection policy has its own definition of partial or total disability that must be met before a claim is made. Check with us for more information.

Income protection insurance can be important if you:

• are self-employed or a small business owner, as you may not have sick or annual leave
• have family members or dependents that rely on the income you earn
• have debt, such as a mortgage, you’ll need to make payments on even if you’re unable to work

If you need help deciding if you need income protection insurance and how much, speak to Milestone Welath.

Choosing an income protection policy

Some of the things you’ll need to consider when choosing an income protection policy are:

Waiting period

This is the amount of time you must wait before your payments start. Most income protection policies offer a waiting period between 14 days and two years.

In general, the longer the waiting period, the cheaper the policy. When you’re choosing the waiting period, think about how much you have in sick and annual leave, savings and emergency funds.

Benefit period

The benefit period is how long the monthly payments will last. Most income protection policies offer two or five years, or up to a specific age (such as 65). The longer the benefit period, the more expensive the policy. But it also means greater protection if you’re unable to work for a longer time.

Stepped or level premiums

You can generally choose to pay for income protection insurance with either:

• Stepped premiums — recalculated at each policy renewal, usually increasing each year based on the higher chance of a claim as you age
• Level premiums — charge a higher premium at the start of the policy, but changes to cost aren’t based on your age so increases happen more slowly over time

Your choice of stepped or level premiums has a large impact on how much your premiums will cost now and in the future.

Generally premium paid for income protection comes with tax benefits.

Give us a call to find out more.