Risk insurance, also known as personal insurance is financial protection designed to support you and your family when life takes an unexpected turn. Whether it’s illness, injury, disability or death, risk insurance provides a crucial safety net so you can maintain financial stability during difficult times.
Your most important asset isn’t your home, car or investments it’s your ability to earn an income. If something prevented you from working, risk insurance helps ensure your finances, future plans and loved ones remain secure.
Why Is Risk Insurance Important?
Life is unpredictable. Without adequate protection, an unforeseen event such as a serious illness or accident can quickly create financial strain. Risk insurance provides the funds needed to cover expenses, repay debts and maintain your lifestyle when you’re unable to do so yourself.
It also complements key areas of your financial strategy, including superannuation, investments and estate planning, ensuring all parts of your financial life work together.
Types of Risk Insurance
- Life Insurance
Life insurance pays a lump sum to your beneficiaries if you pass away. This payment helps cover:
- Ongoing living costs
- Household expenses
- Debts such as mortgages
- Future needs, including education
It ensures your family can maintain financial stability even in your absence.
- Total and Permanent Disability (TPD) Insurance
TPD insurance provides a lump-sum benefit if a permanent illness or injury prevents you from working again. It can help fund medical treatment, living expenses, debt repayment or lifestyle adjustments.
Depending on your needs, TPD cover can be held inside or outside superannuation.
- Trauma Insurance
Trauma insurance pays a one-off lump sum if you suffer a serious medical condition such as:
- Cancer
- Heart attack
- Stroke
The payout is designed to support immediate medical and recovery costs, giving you financial breathing room so you can focus on treatment and healing.
- Income Protection Insurance
Income protection replaces a portion (generally up to 70%) of your income if you are temporarily unable to work due to illness or injury. Monthly payments help you:
- Meet everyday living expenses
- Maintain your lifestyle
- Continue paying rent, mortgage or bills
It acts as an ongoing financial support system while you recover.
Creating Your Plan B – Protecting Your Most Important Asset
Since your income drives your lifestyle, protecting it should be a priority. Each type of insurance covers a different “what if,” and the right combination provides comprehensive protection.
Your ideal mix of cover will depend on:
- Your age
- Family circumstances
- Debt levels
- Income and future goals
Working with a financial adviser helps you assess your needs and determine the most appropriate level and structure of cover.
When Should You Review Your Risk Insurance?
Life changes and your insurance should change with it. It’s important to review your cover when you:
- Start a new job or business
- Buy a home or take on new debt
- Get married or have children
- Experience a change in income
- Approach retirement
Many superannuation funds include default life, TPD and income protection. However, these default levels may not match your actual needs. An adviser can help you assess whether:
- The benefits are sufficient
- The policy definitions and exclusions suit your situation
- Holding cover inside or outside super is more effective
Protect What Matters Most
Insurance products and superannuation policies change regularly. Definitions, benefits and pricing can shift over time, meaning cover that worked for you years ago may no longer be adequate. Regular reviews with your adviser ensure your protection stays relevant and effective.
Your income powers your lifestyle and risk insurance protects it. If it has been a while since you reviewed your cover, now is the time to check in and make sure you and your family are properly protected.
Summary Conclusion
Risk insurance is a critical part of a strong financial plan, protecting your income, lifestyle and family from life’s unexpected challenges.
With different types of cover available life, TPD, trauma and income protection. you can build a tailored strategy that supports your needs now and into the future. Reviewing your cover regularly ensures it remains aligned with your goals, circumstances and the changing insurance landscape.
Ultimately, risk insurance provides peace of mind, knowing that no matter what happens, your financial stability and future plans are protected.
—————BOOK YOUR EXCLUSIVE 15 MINUTE ZOOM CONSULTATION————-
We offer a 15-minute no obligation consultation to existing property investors, first home buyers and small business owners who are looking at property investments, business and asset protection. To Book an Appointment simply click here and pick a time and date.
BOOK YOUR ZOOM APPOINTMENT HERE
How can we help?
If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au or arrange a time for a meeting so we can discuss your requirements in more detail.
General Advice Warning
The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.
Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.
Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.
Recent Comments