What would you and your family do if your car was damaged and you couldn’t drive for a few months? You might borrow somebody else’s car, walk to work instead or hire a car until your car was fixed.
Or what would you and your family do if the kitchen roof blew off your house during a storm, and you couldn’t live there until the roof had been repaired? You might block the room off from the rest of your house, or you could stay with friends until the roof was replaced.
Both of these situations would be a huge inconvenience not to mention be costly, so having these assets insured would be valuable. But what would you and your family do if something was to happen to you? What if you became injured or unwell and were unable to work? How long would you have an income?
For most Australian’s the answer to this question is not long. If you don’t have Income Protection Insurance then once you have used up your sick leave your income stops. Then how do you support yourself and your family? Unfortunately the bank doesn’t waiver your mortgage repayments and the bills still need to be paid. Without a regular flow of income it can become almost impossible to pay for even your basic living costs.
It is not only important that the ‘bread winner’ of the family has income protection in place, but both partners in the family should have appropriate insurance cover. For example, if one parent is working full time and the other parent is taking care of the children, what would happen if something happened to the parent caring for the children? The other parent may have to reduce their work hours to look after the kids, a nanny may be required, or perhaps a full time carer would need to be employed. Either way there would be financial consequences and therefore it is imperative to ensure both partners have adequate protection in place.
Insurance isn’t designed to put you in a better financial position, but it is there to protect your family’s financial position so you don’t have the added stress of paying your bills. You can select cover suitable to your family’s needs so it doesn’t have to cost an arm and a leg. However it is imperative that you regularly review your insurance coverage to ensure your family has the right type of insurances with the right level of cover in place.
Most people don’t think twice about insuring their car and their house, but they don’t think to insure their most important assets – their family and their income. So ask yourselves this – have you insured your most important assets?