Finance is more than debt management, savings and investments. Insurance and estate planning are also key aspects of your financial security – having a will and power of attorney for your property and wealth, as well as insurance for your things and more importantly your life.
But what is insurance and why is it so important?
Simply, insurance is the way we pass financial risk on to someone else. We pay a monthly premium to the insurance company, and they take on our financial risk – so we can be confident that if the worst happens, the insurance company will be there with the money to cover it.
There are different types of insurance to protect you from different events. These include General Insurance, Personal Insurance, and Business Insurance.
General Insurance covers the physical assets you own. Your house, your car, your contents. Having insurance means that you will not be under financial strain if you need to replace or repair damaged or stolen property.
Personal Insurance is the stuff we don’t like to talk about, or to think about! No one wants to dwell on thoughts of dying or becoming unwell and leaving their loved ones in a difficult financial situation. Many of us don’t have Personal Insurance, and don’t really understand what it is and how it can help us when life takes an unexpected nosedive. Life Cover is one type of Personal Insurance that you probably do understand. If you die, your nominated beneficiary receives a lump sum payment. But what if you don’t die? It is also a good idea to get cover for Total Permanent Disability (TPD) and Trauma – these will provide for you in the case of an injury or serious illness. Income Protection is also an important one to consider – if you lose your job or are unable to work due to sickness or injury, this cover will provide a regular payment to replace your income.
Yes, it’s uncomfortable thinking about these scenarios. But it’s probably worth spending a bit of time thinking about it and getting some cover in place, because it will definitely make things a lot easier if you do end up in a situation where you need it.
Here is a more comprehensive look at the different sorts of insurance, and what it all means
That leads us on to… estate planning!
Every adult should have a will. It doesn’t matter if you think your situation is very simple – it’s still a good idea! Your loved ones will appreciate it if you leave unexpectedly. The basics: a Will needs to be in writing, and witnessed by two people who are not beneficiaries of your estate. You can include a lot of detail in your will, or just the minimum.
For lots of useful information about Wills, Enduring powers of attorney, etc. have a look at Community Law and Public Trust. The Public Trust also has a good Facebook page which is very easy to understand.
So how do we go about getting those important things in place?
We can help you with the insurance side of things. Send us an email and we will help you get that process started. You can get your lawyer to help you to make a will, or you can use a trust company such as the Public Trust. You can also ask us and we can put you in touch with various professionals who will be able to work with you on that.
To sum up, there is a bigger picture to your financial security – and as always we are happy to help you figure out your way through the processes involved! We know it can feel daunting, there are lots of reasons that we avoid thinking about insurance and wills – but please do get in touch, and take steps towards ensuring your ongoing financial wellbeing.