Starting a family and building a life together is an exciting journey. You’re busy buying a home, raising children, and planning for a bright future. But with these wonderful milestones comes a new level of responsibility. More than ever, you have people who depend on you financially.
What would happen if you were no longer able to provide for them?
It’s a question no one likes to think about, but planning for the unexpected is one of the most important things you can do for your loved ones. Personal insurance acts as a financial safety net, ensuring your family can manage financially if you were to pass away, become seriously ill, or suffer an injury that stops you from working.
Unsure where to start? Here is the ultimate insurance checklist to help you understand what cover your family might need.
✅ 1. Life Insurance (or Death Cover)
What it is: Life insurance pays a lump sum of money to your beneficiaries (the people you nominate, like your partner or a trust for your children) if you pass away or are diagnosed with a terminal illness.
Why your family needs it: Think of it as a replacement for your future income. This payment can be used to:
- Pay off the mortgage and other debts.
- Cover funeral expenses.
- Provide for your children’s education.
- Create an ongoing income stream for your family’s living expenses, so your partner isn't forced to sell the family home or return to work before they are ready.
Ask yourself: Without my income, could my family maintain their current lifestyle and pay off our debts?
✅ 2. Total and Permanent Disability (TPD) Insurance
What it is: TPD insurance pays you a lump sum if you suffer a serious illness or injury that leaves you totally and permanently disabled and unable to ever work again.
Why your family needs it: A permanent disability can be even more financially devastating than a death. Not only do you lose your income, but your family’s expenses can increase significantly. A TPD payout can help cover:
- The cost of medical treatments and rehabilitation.
- Modifications to your home or car.
- Full-time care or specialist equipment.
- The elimination of debts to reduce financial pressure.
Ask yourself: If I could never work again, how would we cover lifelong medical costs and our regular bills?
✅ 3. Trauma (or Critical Illness) Insurance
What it is: Trauma insurance pays a lump sum if you are diagnosed with a specific serious medical condition, such as cancer, a heart attack, or a stroke. The list of conditions covered is defined in the policy.
Why your family needs it: While your health insurance might cover some hospital bills, it doesn’t cover everything. More importantly, it doesn’t give you financial breathing room. A trauma payment gives you options, allowing you to:
- Take time off work to recover without financial stress.
- Pay for treatments or specialist care not covered by Medicare.
- Allow your partner to take time off work to support you.
- Reduce debts like a credit card or car loan so you can focus on your health.
Ask yourself: If I were diagnosed with a serious illness, could we afford for me to take the necessary time off to recover properly?
⭐ A Special Note: Childhood Trauma Cover
While considering trauma cover for yourself, it's vital to ask about a Childhood Trauma Cover benefit. This is often an optional add-on or a built-in feature of a parent's policy.
It provides a lump sum payment if your child is diagnosed with a specific serious illness or injury. The purpose isn't to replace a child's income, but to give the parents financial options during an incredibly difficult time. This payment allows a parent to take extended leave from work to be with their child, seek the best medical care regardless of location, and manage household bills without the added financial stress.
✅ 4. Income Protection Insurance
What it is: Unlike the other types of cover which typically pay a lump sum, Income Protection pays a regular monthly benefit—usually up to 70% of your pre-tax income—if you are temporarily unable to work due to illness or injury.
Why your family needs it: This is your financial backstop for the more common events that can disrupt your life. Your sick leave will eventually run out. Income protection ensures you can continue to pay the bills, buy the groceries, and meet your mortgage repayments while you focus on getting better. It’s the cover that protects your single greatest asset: your ability to earn an income.
Ask yourself: If an injury kept me off work for six months, how would we pay our regular bills?
Putting It All Together: Your Family's Safety Net
Thinking about insurance can feel overwhelming, but it doesn’t have to be. The key is to see it not as an expense, but as a vital part of your family's financial plan. It’s the promise to your loved ones that they will be looked after, no matter what life throws your way.
A financial adviser can help you work out the right amount of cover for your unique situation and structure it in the most effective way (for example, inside or outside of your superannuation).
Ready to build your family’s financial safety net? Contact us today for a complimentary chat to ensure your loved ones are truly protected.
For personalised financial services and advice, speak with your Financial Advisor today at Elevate Financial Planning
- Arlan Davine
