Getting your insurance sorted
What is insurance, and why do we need it?
If your house were to burn down this afternoon, do you have enough money in your savings account to rebuild it? Probably not, and that’s where insurance comes in.
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 a wide range of insurance types, and a lot of insurance providers. We focus on the important stuff: making sure you’re investing in the insurance you need to protect yourself, your family, and the things you’ve spent your life working for.
There’s more to insurance than life, health, car, and contents. Having an adviser to help you through the minefield of tricky terminology and unfamiliar insurance contracts is a huge support and helps you get the cover you need.
Types of insurance
There are different types of insurance to protect you from different events, these include:
General Insurance
Personal Insurance
Insuring your car makes sense: it protects you from taking a hit to the wallet if someone rear-ends you at the lights! Many people don’t see personal and life insurance so clearly, but it shouldn’t be neglected.
Personal insurance covers you and your family for the events that we don’t like thinking about. It means that if you’re unable to work for a while, or if the worst happens and you pass away unexpectedly, your loved ones will still be OK. We encourage people to think about this kind of insurance from the perspective of their families.
Personal Insurance
Insuring your car makes sense: it protects you from taking a hit to the wallet if someone rear-ends you at the lights! Many people don’t see personal and life insurance so clearly, but it shouldn’t be neglected.
Personal insurance covers you and your family for the events that we don’t like thinking about. It means that if you’re unable to work for a while, or if the worst happens and you pass away unexpectedly, your loved ones will still be OK. We encourage people to think about this kind of insurance from the perspective of their families.
Types of personal insurance include:
- Life Cover
If you become terminally ill or pass away, your life insurance will pay out a lump sum. This is often used to cover funeral costs, enable your family to pay off any debts (like a mortgage), and perhaps provide some funds to support your loved ones into the future. - Total Permanent Disablement (TPD)
If a serious accident or illness means you can no longer work in the industry you are trained for, TPD insurance pays you either a single lump sum or an ongoing monthly payment. TPD payments are often used to cover medical treatment costs, or the cost of house adjustments (like installing accessible showers or ramps). - Trauma
Trauma insurance provides a lump sum payment in the event of a serious illness or accident (for example a heart attack, stroke, or loss of limb). Trauma payments are helpful to cover medical bills and treatments, and to make sure you can keep your head above water while you recover from your injury or illness.
- Income protection (or Mortgage and Living Cover)
Do you have enough in your savings account to see you through for a few months after a sudden job loss? If sickness or injury puts you out of a job, Income Protection cover will provide a monthly payment, to replace your income. Income Protection provides a lot of peace of mind, particularly if you’re the sole provider for your family.
We tend to think of our home as our biggest asset, but actually it’s our ability to earn!Some quick maths:
Say you earn $50,000 per year. Over 40 years, that’s $2 million.
If you had no income and were reliant on government support, you could be getting up to $350 per week (the job-seeker benefit for a single person is around $250 a week, plus you might be eligible for a $100 per week accommodation supplement). Over 40 years that is around $730k… and that’s why income protection insurance is a smart move! - Health
Nobody plans to get sick, but sometimes life throws us a curveball. With health insurance, unexpected medical costs aren’t going to be a financial burden in an already difficult time. Without health insurance, your best option is a private fundraising site like GiveALittle, or a savings account that might not be full enough.
Business Insurance
It can be extremely rewarding being in business… but there are substantial fines if you get it wrong. Whether you are a sole trader or a large company, there’s always a risk of you or someone in your organisation doing something that isn’t compliant with legislation: often through ignorance, or cutting corners.
Too many business owners are working without understanding the risks, and the protection that is available to them. The cost of not having the appropriate commercial insurance cover in place could be the difference between staying in business or having to shut the doors.
Insurances to cover events that can occur through the normal course of your business are called Public Liability and Indemnity.
There are many different types of business insurances available. As well as the ones listed below you can also get business cover options such as director, statutory liability and cyber cover.
- Public Liability Insurance
If your business activities cause a member of the public to be injured or have their property lost or damaged, Public Liability Insurance covers your cost of compensation. - Indemnity Insurance
This commercial insurance protects you and your company against any allegations of professional negligence. If you’re seen by clients as an expert in your field, you should have this insurance – just in case you accidentally give the wrong advice, or your advice is misinterpreted, and your customer suffers loss as a result. - Business Overhead Insurance
This covers your business overheads such as rent and operational expenses if you are unable to work due to serious illness, or injury. It is paid as a monthly benefit. - Key Person Insurance
You can also get insurance to cover the loss of a key person in your business, due to injury, serious illness, or death. This is usually a monthly lump sum which can be used to cover staff replacement, training, loss of profits, etc.
Insurance
We are building for good!
Creating financial security together is more than just a ‘tag’ line to the team at Building on Basics. We’ve partnered with B1G1 (Buy1Give1) to provide opportunities for so many more to have the chance to achieve their financial goals. We are building for good!
