Skilled Migrant Professionals October 2014 | Page 35

Money
being ‘own occupation’ or ‘any occupation’. It is up to you to choose a
definition when taking out your policy.
Under the ‘own occupation’ definition, the insurer pays an agreed
benefit when the individual is unable to perform the duties of their own
occupation. For example, a surgeon who loses his left arm may still be
able to practice as a general practitioner but he will suffer a significant
drop in earnings.
Under the ‘any occupation’ definition, the insurer pays an agreed
benefit when the individual is unlikely to engage in gainful employment
for which they are reasonably qualified by education, training or experience as a result of the disability.
TPD insurance will help you cover the costs of rehabilitation, debt repayments and the future cost of living.

Trauma Cover
Trauma cover comes into play when
a serious illness can make it difficult or
impossible for you to continue to work.
If this happens, you will need to find a
way to support yourself and your family. Trauma cover can provide a financial
safety net.
Trauma cover is also referred to as
‘critical illness’ cover or ‘recovery’ insurance. Trauma insurance provides cover if
you are diagnosed with a specified illness
or injury. These policies include the major
illnesses or injuries that will make a significant impact on a person’s life, such as
cancer, heart attack or a stroke.
Trauma insurance pays a set amount. This can be used for things like:
• Any private medical costs above your health insurance
• The ongoing cost of any therapy and special transport costs
• Adjustments to housing and lifestyle changes
• Debt repayments
Child cover
Child cover comes under the umbrella of trauma cover. Usually child
cover can be provided as an addition to a parent or guardian’s policy.
It comes at a small increase to your premium, but protects your family
from a financial burden in the event of serious medical conditions affecting your child.
Insurance for your child covers a number of different trauma conditions, and usually includes: death, cancer and heart conditions. Additional conditions may vary depending on the insurer. In order to apply
for this type of cover the child’s age has to be between two to 15 or 16

Chits Nyamidzi Financial Planning
BAOBAB wealth management
PTY Ltd Authorised Representative
of AMP financial planner PTY Ltd

years old. This cover expires once the child has reached the age of either
20 or 21 depending on the chosen insurer’s conditions.
Death Cover
Talking about dying isn’t easy but in view of those you will leave behind, it’s worth some thought. By setting up a way to support your loved
ones after you die, you can ensure they can continue to pay the mortgage and school expenses, go on holiday and buy essentials.
Death cover, also known as term life insurance or life cover, pays a set
amount of money when the insured person dies. The money will go to
the people you nominate as beneficiaries on your policy.
When deciding how much life cover you want, think about:
• All your debts
• Your children’s future childcare and education costs
• How much income your family will need to live comfortably

CONCLUSION
Despite having discussed the main types of insurance policies, I know that one question still remains: how much of each type of coverage
do I need? I recommend that you speak with your financial planner and he/she will help you complete a “needs analysis” and implement a
suitable strategy for the funding of your insurance premiums. One thing I would like to leave you with is this: remember that you have to be
comfortable with the level of insurance you are taking out and the premiums should be affordable to you. Having your financial planner help
you conduct a cash-flow analysis might also assist you in assessing the impact of the additional insurance costs on your personal cashflow.

October 2014 | www.smpmagazine.com.au

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