Why you need insurance
Insurance can help you stay financially secure when the unexpected happens. It can’t prevent accidents, illness or injury but it can provide financial protection if they occur. Without insurance you may have to use your savings or other assets to make sure you can cover your outgoings.
It’s an important part of any sound financial plan to consider how you would manage financially if:
- you were unable to work for a long period due to illness or injury
- you needed expensive medical care or treatment
It’s also good financial planning to consider how you and your family would manage in the event of your death.
It’s too expensive
Insurance is a sometimes seen as a luxury for the rich. However, most people would not be able to cope with the loss of income to be able to meet financial commitments such as the mortgage. So, wherever you sit on the income scale, insurance is a way of protecting yourself if you end up in financial difficulty.
Having sufficient insurance to protect you and your family could cost less than you think. The cost of insurance for you will depend on your individual circumstances and insurance needs, so speak with your financial adviser for more information.
The examples in the table below show that for less than $3 a day, a 45 year old non-smoking male could take out $750,000 worth of Life cover, as well as TPD cover.
| Type of insurance | What it does | What it costs |
| Term Life | Term Life Insurance pays a lump sum amount if you die or are diagnosed with a terminal illness. | Around $2 a day for $750,000 cover.1 |
| Total and Permanent Disablement (TPD) | Total and Permanent Disablement (TPD) Insurance pays a lump sum benefit if you are unlikely to work again due to a permanent disability. | Around $3 a day for $750,000 Life and TPD cover. |
| Living Insurance | Living Insurance (sometimes referred to as trauma insurance or critical illness) pays a lump sum benefit if you suffer from one of a range of specific medical conditions such as cancer, a heart condition or loss of a limb. | Around $7.20 a day for $500,000 Living Insurance. |
| Income Protection | Income Protection Insurance replaces up to 75% of your income (and 100% of compulsory superannuation contributions) while you are unable to work due to sickness or injury. | Around $1 a day to provide Income Protection of $3,000 per month, and the premium may be tax deductible. |
1 It costs less than $2 a day for $750,000 cover based on a non-smoking 45 year old male, NSW resident. (Rates: BT LPP Term Life policy current as at 28th September,2009).
Learn more about Basics
BT Portfolio Services Limited ABN 73 095 055 208, AFSL No. 233715 (BTPS) arranges the issue of the BT Life Protection Plans (Wrap and Wrap Essentials) by Westpac Life Insurance Services Limited ABN 31 003 149 157, AFSL No. 233728 (Westpac Life).
BTPS adminisites BT Life Protection Plans (SuperWrap and SuperWrap Essentials). Trust Company Superannuation Services Limited ABN 49 006 421 638 is the trustee and issuer of SuperWrap and Westpac Life is the insurer.
Westpac Banking Corporation ABN 33 007 457 141 is a distributor and is not responsible or liable for payments under BT Life Protection Plans.
Did you know?
Only 4% of typical working families with dependant children have the life cover recommended by experts to cover their needs.
You can arrange certain types of insurance through your superannuation. This may be a tax effective way of establishing your insurance and your premiums may also be more cost effective.
