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Personal Insurance: Full Guide to Varieties and Benefits

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Life insurance or personal insurance is an essential part of your financial career. Personal insurance is not only built to take care of your finances, but much rightfully so, takes care of your entire family as well.

Personal insurance covers your expenses and gives financial security. There are many benefits associated with personal insurance. Some of the services include paying off debts, retirement plans and even health safety.

A young woman sitting on a sofa and carefully going through a personal insurance booklet

The remarkable fact about personal insurance is that you do not have to handle your finances. If you sign up for personal insurance, your finances will be taken a good care.

let’s get into the details of the types of personal insurance that are available for you

Term Life Insurance

Term life insurance refers to an agreed lump sum. The payment insures in the event of death of the person who has taken up the insurance. After the term expires, there are three available options which can be accessed such as-

  • Renewal of the insurance for another term
  • Converting the policy into permanent coverage
  • Terminate the policy

Term life guarantees the payment to the stated beneficiaries as listed by the individual who passed away. Hence, this personal insurance helps to cover the living and other expenses of the family when you’re not around.

Term life insurance is insured based on one’s age, health and life expectancy.

Income Insurance or Protection

Income protection is a personal life insurance that allows for regular sums to be paid if in case accident takes place. This insurance pays up to 85% of the pre-tax income for a certain period.

To decide whether or not you need income protection for your insurance, consider checking if you have family members and dependents relying on your income. Income protection can help you pay mortgage bills and debt if you’re unable to do so due to any disability.

Income protection has some specific policies. If you’re considering to sign up for income protection insurance, take a note of the two different systems available. Of the two policies, indemnity value policy is beneficial for people who have a stable income. With indemnity value policy you’ll be insured for a specific percentage of your salary. It is also relatively cheap in option.

On the other hand, there’s also agreed value policy functions with a percentage of an agreed amount. It is generally a bit expensive; however, it is beneficial if your income changes year to year.

Insurance for trauma

This personal insurance provides a lump sum if the individual who signed up for the policy is diagnosed with many complications such as heart attack, cancer etc. trauma insurance helps to cover your medical costs, including living expenses during your absence. Trauma insurance also covers Special transport, therapy and nursing expenses

If you think you need to include trauma insurance to your insurance list, you can directly purchase it from an insurance company or contact an insurance broker.

Personal travel insurance

Travel insurance protects a lot of your costs, including common travel problems. The insurance makes sure that if you’re on a getaway, you get a coverage for any accidents, illness or even lost baggage.

You can reclaim your costs if you want to cut expenses from your trip. There are namely three travel insurance options you can choose from:

  1. Insurance for single trip: this option might be suitable for you if you’re planning to cover your trip to Australia
  2. Insurance for annual multi-trip: you can save a lot of money by signing up for multi-trip yearly insurance if you plan to travel at least twice a year. This insurance allows you to buy a specific policy for the entire year.
  3. Insurance for backpackers: you can cover long trips if you’re planning to backpack for holidays in Australia. This insurance makes sure that you’re well-off for your holidays and you do not have to spend extra than needed.

Personal insurance through super

You can always choose to cover your insurance through super funds. If you intend to do so, you’ll automatically have life cover and TPD insurance. Some super funds also come with the availability of income protection.

A man and a woman discussing about finances in a office setting

Covering for your insurance have plenty of benefits, such as:

  • Flexible payment:   As you sign up for personal insurance through your super, insurance premiums automatically deduces.
  • Buy premiums in a cheap rate: since super funds are bought in bulk, the insurance premiums are much affordable in rate.
  • Health check protection: if you have any health conditions, your super fund will cover for your health issues. The coverage system happens in a default level as you sign up for your personal insurance via super funds.

So What Are the Benefits of Personal Insurance?

As much as it gets you in a level of financial acceptance, it makes sure that you hassle less with issues such as retirement plans and debt consolidation.

Some of the benefits include:

Creation of wealth through personal insurance:

Personal insurance plans can help you create and build your wealth. Apart from covering your personal expenses, you’re being able to save a lot of money by signing up got different policies. You can put the extra money in your superannuation.

Financial safety

there’s no doubt that personal insurance ensures that you have financial security. Since all of us have some financial liability, we know that insurance takes a lot of load off from our shoulders. Insurance will make sure that your family is under a safety net even after your demise. Having the safety net to take care of your family brings peace of mind.

Retirement planning

one of the significant benefits that you can get from personal insurance is retirement planning. Personal insurance helps you to budget efficiently for your retirement plans. Through personal insurance, you can earn a pension and relax throughout your retirement period. Since insurance policies save a lot of room for other investments, a retirement plan is one of them. If you start saving for retirement early, you can build a healthy retirement corpus.

Conclusion

Overall, With a perfect insurance plan, you ought to build on your wealth. The great news about having insurance is that you do not have to worry about getting bankrupt or stay on edge for paying off your bills.

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