A guide to different types of Life Insurance

Read how choosing the right types of Life Insurance can help protect your family if something were to happen to you.


Margaret Rochford

17 May 2018 - 5 minute read

Choosing the right types of Life Insurance – that is, Total and Permanent Disability Insurance, Trauma Insurance, Income Protection Insurance and, of course, Life Cover – can help protect your family if something were to happen to you.

There was a time when  people simply saw Life Insurance as being death cover. That is, a lump sum payout if you were to pass away. However, there’s much more to it than that, with cover being available for situations other than the passing of a family member.

Indeed, a catastrophic injury leading to total and permanent disability could actually put more strain on the family finances than an unexpected death. Working out what you need can be tricky, particularly if you aren’t clear about how the different types of Life Insurance covers can support you particularly in the event of an accident or serious illness.

Here’s an example of how different types of cover might prove indispensable.

A true life scenario

Graeme and Alice are married with two children. They have recently purchased their first home and have a mortgage of $300,000. Graeme works full time as a teacher while Alice stays home to look after their young children. Graeme took out a modest Life Insurance policy when they bought their house, but decided against the other Life Insurance covers of  Total and Permanent Disability Insurance (TPD), Trauma Insurance or Income Protection Insurance.

Graeme suffered a severe spinal injury while surfing. He was left a quadriplegic and faced  a lengthy rehabilitation period, following which he is unable to return to his work in the classroom. Alice still needs to stay home to care for their children but now she has to deal with the additional strain of being  Graeme’s carer as well.

Because Graeme only took out Life Cover (which is payable only on his death), they have no other insurance benefits in place which can assist them at this most desperate time.  They began struggling to meet their monthly mortgage payments and also the mounting medical expenses; and on top of all this, their home needed to  be modified to accommodate Graeme’s wheelchair. They faced the very real prospect of losing the family home and then having to find a suitable place to live on disability benefits. .

If they had Total and Permanent Disability Cover in place, Graeme could have received a lump sum payment up to a maximum of $5m and in addition, if Graeme also had Income Protection Insurance cover in place, he would continue to be paid up to 75% of his salary each month. The lump sum TPD  payment could  pay off  their mortgage and the Income Protection payments would cover their day-to-day living expenses up to age 65 (if they had chosen this longer benefit period)..

If they had also taken out Trauma Insurance, in view of Graeme’s spinal injury (quadriplegia) they would be entitled to a lump sum payment of up to $2m,  which they could use particularly to cover the higher level medical expenses, any modifications to the family home,  and also access the best  rehabilitation treatment for Graeme. If any complications arose with Graeme’s condition and he were to pass away, Alice would be entitled to the remainder of his Life Insurance benefit under the death cover. .

Get peace of mind

Examples like the above show how Life Insurance is about much more than a lump sum payout upon a person’s death. With the right covers in place, families can cover their financial circumstances not only on death, but also  following  a traumatic event or serious illness.

Comprehensive Life Insurance such as NobleOak’s Premium Life Direct – which has the option to include Total and Permanent Disability Insurance, Trauma Insurance and Income Protection Insurance – offers you the peace of mind that your family will be provided for, no matter what life might throw your way.

Call NobleOak on 1300 041 494 to request a quote.



Read how choosing the right types of Life Insurance can help protect your family if something were to happen to you.

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