You might be tempted to think that insurance is a waste of money. The bills just keep rolling in, premiums disappear from your bank account, and at the end of the day you have nothing to show for it.

But if you’ve had the misfortune of needing to make an insurance claim, you probably won’t feel this way. You don’t need insurance…until you do.

Without even thinking about it, most Australians will get car insurance and home & contents insurance. It’s a no brainer – you wouldn’t want to fork out for a replacement car or house repairs in the case of an accident.

But what about your income? In reality this is the number one thing people would struggle without. And yet we don’t insure this by default in the same way we do a car or house.

Here are the types of insurance covers you should be considering.

Life insurance

Also known as ‘death cover’, this is often covered by employer superannuation funds, so make sure you check your super account to see what you’re insured for.

A death places a lot of pressure on families. If you have dependents, this is especially true for you. You want to make sure you don’t leave your family in financial stress, but instead have a cover that will help them with bills, housing costs, living expenses and more.

TPD (Total Permanent Disability) insurance

This is another insurance that is commonly covered by superannuation funds. TPD insurance covers individuals in the case of permanent injury or illness. It could protect you and your family from financial stress, and can also help pay for medical care and rehabilitation expenses.

Trauma/Crisis cover

As the name suggests, this insurance protects you in the case of a trauma or critical illness. This could include things like stroke, cancer, or major injury. It is usually paid as a lump sum and is not dependent on the person being able to work or not.

Income protection/salary continuance

This insurance replaces up to 75% of your income for the benefit period in the event that you are no longer able to work due to illness or injury. The standard benefit period is 2 years, paid in monthly instalments.

Anyone with a stable job should consider income protection insurance. Particularly people with dependents, loans or liabilities. This cover insures your lifestyle so that you can cover all the usual expenses that you rely on an income for.

Business protection cover

Business owners who want to protect against the consequences of death or serious illness or accident need this insurance. It can be structured to provide businesses with cash to preserve assets and revenue.

Accident only cover

This is a less comprehensive cover than trauma insurance, as it won’t cover illness. It’s a good option for those with underlying medical issues that aren’t eligible for other types of insurance but still want to be covered for the unexpected.

Should young people bother with insurance?

If you’re young and healthy you might be reading this thinking “I don’t need to worry about getting insurance yet”.

But that’s the benefit of insurance – protecting you against the unexpected. Whether you think you’ll need it or not is besides the point. It can take a lot of pressure off in the case of significant illness or injury.

If you see paying your car insurance as worthwhile, then you might want to give a little more thought to other insurances.

Young people will usually pay lower premiums for the types of insurance listed above. They will often be able to get ‘level premiums’ which only increase with inflation and not by your age. This can be a cost-effective option if you’re retaining insurance over a long period.

To get personalised advice on what cover is best for you, Book a complimentary discovery session.