Finding the Right Life Insurance Product
TPD - Total and Permanent Disability
Total and Permanent Disability (TPD) cover usually pays a lump sum if you became totally and permanently disabled.
TPD is usually purchased as an addition to Term Life cover, but can also be taken out separately or with Trauma insurance.
Income Protection
Income protection generally pays you a monthly income if you suffer an illness or disability that prevents you from working.
It may be that you have had an accident and it's going to take months to recover, or maybe you can never work again through illness.
Most policies pay up to 75% of your net income either for a specified period or until you reach the age of 65 (if income protection is held within Super, the benefit period may only be 2 years!).
Life Insurance
Life or Term Life insurance pays out a lump sum if the policy holder dies before a a pre agreed date (the 'term').
With Term Life insurance, the life you're really insuring is yours, for example, to provide for your family and dependants if you weren't around. Ideally the lump sum will be enough to provide for your families long term financial requirements.
Life insurance isn't just for the main salary earner, if you are a homemaker you should consider how your other half would be able to run the household and keep down a full-time job if your weren't around? Life insurance can therefore be invaluable for both partners in a relationship.
Trauma
Trauma cover is paid out on the diagnosis of a defined critical illness, for example cancer, heart conditions and strokes.
If you're diagnosed with a critical illness, trauma insurance can relieve your financial difficulties. Unlike income protection, which is dependant on your inability to work, trauma cover aims to provide a payment on the diagnosis of the defined critical illness regardless of your working status.
