"It is a very sad thing that nowadays there is so little useless information." - Oscar Wilde

Knowledge is powerful, we all know that! It allows us to identify and take action when we recognise risks or opportunities.

However, what happens if for all intents and purposes we think we have the knowledge, but really we only have part of the knowledge and thus only part of the solution?

An example of this is when I ask a new client who has been referred to Exceed: "As part of your financial strategy, do you have all your family risk protections in place?"

The answer more often than not is: "Yes, I've got life insurance!"

My next question is: "What about TPD, Trauma, Income Protection and Business Expenses Insurance?"

Typically the response is: "Um, I'm not sure, maybe. What's Trauma insurance?"

Hence this month, for the purposes of increasing your knowledge (and power), I thought I would go back to basics and summarise the types of personal and business insurance and what they're for.

Life cover for death and terminal illness:-

  • Helps the family eliminate debts and stay in the family home
  • Provides an ongoing income for the family
  • Pays medical bills and funeral costs
  • Allows for business buy/sell funding and key person cover

Income protection cover for sickness or injury:-

  • Helps families keep up with mortgage repayments and day-to-day living expenses
  • Premiums are generally tax-deductible

Total and Permanent Disablement (TPD) cover for permanent incapacity:-

  • Helps eliminate debts and cover long-term care costs
  • Pays for modifications to the family home
  • Allows for buy/sell funding and business key person cover

Trauma cover for serious illness or accidents e.g. heart attack, cancer and stroke:-

  • Pay out-of-pocket medical costs
  • Clears debts
  • Helps spouse take time off work to provide care
  • Allows people to make lifestyle changes to get better– like reducing work hours or taking extended time off to recuperate

Business expense cover for sickness or injury:-

  • Pays a monthly benefit to cover your fixed business expenses – such as tools and equipment hire, motor vehicle leases and advertising commitments
  • Helps keep your business running in your absence
  • Premiums are generally tax-deductible

Ask yourself this, if you were to die, become severely ill or disabled tomorrow, would your plan ensure your family and/or business partners were able to cope financially?

I hope this increases your knowledge this month.

Cheers, Ben.