A weekly blog of Uma Mahadeva.
Risk and Mitigation – Insurance
Are you covered?[/vc_column_text][/vc_column_inner][/vc_row_inner][vc_column_text]Posted by : Uma Mahadeva 21 July 2014.
There are many events that can impact on you financially if they occur. Below are the broad ways of mitigating the impact of these events occurring using insurance.
As the name suggests life insurance pays out a lump sum to a nominated beneficiary (spouse or child as the case may be) in the event of the death of the insured. Other types are total permanent disability (TPD), trauma cover and income protection. This website gives more information:
Home and content insurance
The family home is usually the most expensive asset a person owns in addition to having a personal sentimental value. Home insurance protects against damage from natural disasters and malicious damage (e.g. vandalism). It is useful to check your policy and ensure that you are protected from most types of damage, especially against damage that is specific in your area (i.e. bush fire prone, flood prone areas).
Content insurance protects against damage to the contents of the house. If you have something of value in the house- e.g. jewellery, insurers usually do a special assessment to insure that specific item for you.
You can usually bring down home and content premiums by installing a security alarm systems.
Mortgage insurance covers mortgage payments in the event of disability affecting income and unemployment. It usually covers periods between 12 months and 5 years. The premium is typically around 1% of the loan amount. It is useful to have this as it also covers unemployment which is not usually covered by income protection insurance.
Landlords insurance covers your investment property against unexpected damage of the building and contents. It can also cover rent default or theft / malicious damage by the tenant.
Other type of insurance you may want to consider is car insurance and health insurance.
Finally as cost of premiums can be prohibitive the right balance needs to be struck between the cost of insurance, the likelihood of an event happening and the impact that ensues if it does happen. Also as insurance policies change from time to time in terms of cost and coverage an annual review of your policies is highly recommended.
This article is general in nature and is not intended to replace the specialist advice of a qualified professional. If you wish to discuss your financial or insurance needs further please contact us on the email below.
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Objective Financial Solutions
P.O Box 1071
Doncaster, Vic 3108
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