Personal Insurance – What is what?

With so many types of insurance products on the market today, it can be difficult to know what insurance products you actually need. We all know we should insure our car, house and other tangible assets – but what is personal insurance and do we really need it?

Merriam-Webster defines Personal Insurance as:

1: insurance of human life values against the risks of death, injury, illness or against expenses incidental to the latter

2: insurance purchased for personal or family protection purposes as contrasted with insurance of business property or interests

Personal insurance is a way of safeguarding the financial future for you and your family. For example, if you were to become sick or injured and unable to work, personal insurance would provide the funds to continue paying the everyday bills and medical expenses. In the event of an untimely death, personal insurance can ease the financial burden on your family for years to come.

Our personal insurance requirements change as we move through different stages of our life. As you get older, start a family, buy a home and other assets, your priorities change and your personal insurance cover should reflect this.

In Australia, personal insurance can commonly be broken into three categories:

1. Life insurance encompasses a variety of products, including policies that provide payment upon death, continuous disability or trauma.
2. Health insurance provides payment for the provision of hospital and ancillary medical and health services.
3. General insurance covers matters not addressed by either life or health insurance, such as product liability, travel, professional indemnity, sickness and accident. ¹

Do I need personal Insurance?

Let’s take a look at some statistics:

• One in five families will be impacted by the death of a parent, a serious accident or illness that renders a parent unable to work;
• The typical Australian family will lose half or more of their income following a serious illness, injury or the loss of one of parent as a result of underinsurance;
• 95% of families do not have adequate levels of insurance. ²

Your ability to work and provide an income for your family is your most important asset, so it makes sense to protect it.  Personal insurance offers peace of mind that should the unthinkable happen your family will be provided for financially.

Don’t risk your financial future by being under insured or not covered at all. Greentree Financial can help you determine how much cover you need and what personal insurance products would be suitable for you, based on your own individual needs.

1. Source: https://www.alrc.gov.au/publications/25-use-genetic-information-insurance/personal-insurance-australia
2. http://www.lifewise.org.au/downloads/file/aboutthelifewisecampaign/2010_0203_LifewiseNATSEMSummaryA4FINAL.pdf