Common Insurance Policies Families Get
Insurance plays an important part of our lives. It helps us prepare for all kinds of eventualities in the future and provides support when we and our loved ones are in need of assistance. Insurance is also crucial to our financial health as unexpected incidents could cost us significantly without insurance.
Thinking about the portfolio of insurance policies becomes even more important once you have a family. You want to make sure that your children will be able to grow up healthy and also be provided support in case of unfortunate events.
So what are some of the family insurance policies you should consider?
Family Health Insurance
Ensuring all members of your family are covered for necessary medical needs is one of the most important things you must do. If you are a growing family, you would need pregnancy and birth treatments. Your kids (the dependants) could get into all kinds of accidents, preventative care, or illnesses you must be prepared for as parents. Out-of-pocket costs can cause great financial strain on your budget. In addition, the Government charges the Medicare Levy Surcharge for families without adequate levels of health insurance for all members.
According to a study, over 95% of Australians do not have adequate levels of life insurance. Given that 1 in 5 families experience death, accident or illness of a parent, having a life insurance policy can give some financial cushion for your family in the unlikely scenario that you and/or your partner passes away.
Life cover pays a lump sum when you die or are diagnosed with terminal illness. You could already hold life insurance through your superannuation and you can increase your level of cover if desired. However, you’d be able to get more tailored policies through insurance providers.
Income Protection Insurance
Income protection insurance provides incremental, scheduled payouts when you are unable to work due to injuries or illnesses. It’ll cover up to 75% of your income for a certain period of time, which will vary based on the insurance provider. This gives you and your family some buffer during difficult times and allows you to search for suitable alternatives with less pressure.
General life insurance (life cover) only covers the event of death or terminal illness whereas income protection insurance covers a wider range of scenarios where you would no longer have access to income streams.
Family Travel Insurance
Australian families spend over $34 billion on vacations a year. Exploring new cities and cultures is an experience you want to share with your children but it also comes with some risks. Moving with a bigger group, especially with children, increases the possibilities of missing your flights or having to reschedule. This can be costly if you have to do so for 4-5 people and having a family travel insurance policy could easily solve the problem.
Travel insurance also includes medical emergencies in case you have to urgently access hospital treatments abroad. Some even cover pregnancy and birth services in case you have a premature birth while traveling. The whole family can get a single plan and kids are often added for free. You can get travel insurance directly from a insurance provider or through other service providers in a bundle offer such as through a credit card company (e.g., American Express).
Family Funeral Insurance
Funerals can cost anywhere between $4000 to $15,000 in Australia. This could be a stressful financial burden in addition to the grief your family is experiencing. Hence, more Australian families are considering family funeral insurance to remove any financial strain on your remaining loved ones in the event they need to arrange your funeral.
Most policies will offer immediate cover, meaning no waiting periods to access the benefits. However, there could be some restrictions in the first few years of coverage. Since premiums can increase over time, you may want to purchase funeral insurance a little later in life.