Once you pass the age of 55, having appropriate insurance cover is extremely relevant. Why? Well, it’s still important to consider the loved ones who are dependent on you and any financial obligations that rely on your current income.
There are a number of ways of insuring yourself – and your earning power – that should be considered when aged 55 and over.
Insurance coverage is particularly important for those who haven’t yet paid off their mortgage, have other forms of debt and/or dependent family members. Being over 55, insurance can help you protect your last ‘earning years’ to see out your savings and investment plans.
For example, if your retirement strategy is predicated on just putting more money into your superannuation or investments, then an accident or illness that prevents you from earning could really throw a spanner in the works.
Income Insurance (Income Protection Insurance)
If you had a car accident or major illness and you were off work for an extended period of time, how long could you keep paying the bills? What would you live on? And beyond that, how would your retirement savings plan look if you weren’t able to continue your payments into your superannuation or investment fund?
Income protection insurance is one of the most important types of insurance cover for the working person of any age – including the self-employed.
It can replace up to 75% of your income over a specified time if you can’t work because of sickness or injury. And the payments you make for income protection insurance are often tax-deductible.
When we are young, we think little about our own mortality. But once you’re past your mid-fifties, it’s a reality that must be considered.
And while we’re sure you’re not expecting it tomorrow, it is important to make suitable plans to leave your family financially fit once you pass on.
In the event of your death, life insurance gives your spouse an income and allows them to pay off debts, which helps reduce stress during the grieving period.
Total and Permanent Disability Insurance (TPD)
If you’re still working and you suffer an accident or certain type of illness that means you won’t be able to work in the same capacity you’ve done in the past, you receive a lump-sum payment that will help you readjust your life, reorganise your priorities and look after yourself – so you can continue with the best possible quality of life even though your circumstances have changed forever.
Note: This type of insurance is often an add-on to life insurance.
These days, it’s amazing the kind of things you can recover from with the right medical care. But what happens after you survive? Let’s say you had a heart attack or suffered a serious accident when you were driving – how would you cope with the fallout?
This type of insurance protects you and your family members financially in the event of disability or a serious illness, so your partner or family don’t get stuck with the cost of looking after you until you get back on your feet.
Trauma Insurance is becoming increasingly popular and is often combined with life insurance into a single policy.
This is vital for anyone operating a business, or anyone who is in a business partnership. Business insurance incorporates life, trauma and income protection insurance. You get all three in one policy.
It protects your business, your personal assets and your income from being eroded when the main income earner is injured or suffering from an illness.
How Ethica Can Help YouBetter Financial Planning is in Our DNA
This is particularly important for those who haven’t yet paid off their mortgage, have other forms of debt and/or dependent family members. Being over 55, insurance can help you protect your last ‘earning years’ to see out your savings and investment plans.
Although you may be nearing the end of your working years, it’s not too late to look at your wealth building options to fund your aspirations. However, without the luxury of years of compounding, your investment decisions are very important.
The Federal Government has made some changes to the aged pension in recent years, with further changes currently on the drawing board. The team at Ethica keeps up to date with the latest requirements for receiving a part or full aged pension, so we can answer your questions.