Why Personal Insurance Matters for Young Australians

As a financial planner, it's evident that many Australians diligently insure their cars, homes, and other tangible assets. However, it's often overlooked that your most valuable asset is, in fact, yourself. If you consider your potential earnings from now until retirement, it often amounts to millions of dollars. Yet, most Australians don't safeguard this multi-million dollar asset.

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Personal insurance is essential as it provides financial protection in case of unforeseen events such as death, permanent disability, or inability to work due to illness or injury. Ensuring you have adequate personal insurance is a crucial step in securing your financial future.

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At Steering Wealth, we understand that safeguarding your future starts with making wise financial decisions today. One of the most crucial aspects of financial planning for young Australians is obtaining personal insurance. While it might seem premature to consider insurance in your 20s or 30s, securing the right coverage now can provide invaluable peace of mind and financial stability for years to come.

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The Types of Personal Insurance

Understanding the different types of personal insurance is the first step towards making an informed decision. Here is a breakdown of the essential personal insurances that a Financial Planner at Steering Wealth can help you navigate:

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Life Insurance

This type of insurance pays out a lump sum to your family in the event you pass away or develop a terminal illness. This lump sum would be provided to one of your dependents like a spouse and is generally used to pay off your debts, cover living expenses, pay funeral expenses and education costs. Getting this type of insurance while you are young and healthy ensures that the premiums are lower and you get comprehensive coverage that can adjusted as your lives change.

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Total and Permanent Disability (TPD) Insurance

This type of insurance will pay a lump sum to you and your family if you become permanently disabled and cannot work ever again. This lump is generally used to pay off your debts, cover living expenses, cover medical expenses and home modification expenses and pay education expenses.

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Income Protection Insurance

This type of insurance pays a monthly income stream to you and your family in the event you are injured or have an illness that prevents you from working. This income stream is used to replace your income and is generally used to pay your mortgage repayments and living expenses. This income stream can be paid until you are age 65. For young Australians this type of insurance is incredibly important as most of your income will come from employment or business income and needs to be protected to ensure ongoing financial security.

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Trauma Insurance

Trauma insurance, also known as critical illness insurance, provides a lump sum payment if you are diagnosed with a specified serious illness or injury, such as cancer, heart attack, or stroke. This coverage can be used to pay for medical treatments, make necessary lifestyle adjustments, and support your family during a difficult time.

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How a Financial Planner Can Help

Navigating the complexities of personal insurance can be daunting, but that's where Steering Wealth is able to assist. We have knowledge of every insurance company in Australia and their various products. We know which insurers are competitive for different situations and occupations and medical histories. Since we are a separate organisation we are able to recommend any of these insurers and are not limited to a specific insurer.

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Personalised Risk Assessment

We at Steering Wealth take the time to understand your unique circumstances, including your financial goals, lifestyle, and potential risks. By conducting a thorough risk assessment, we can identify the types and levels of insurance that best suit your situation.

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Finding the Best Policy

With access to a wide range of insurance providers, we compare policies and find the best coverage options at competitive rates. We ensure that you understand the benefits and limitations of each policy, helping you make an informed decision that aligns with your long-term financial plan.

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Regular Reviews and Updates

Life is unpredictable, and your insurance needs may change over time. Steering Wealth provide ongoing support by regularly reviewing and updating your insurance coverage to reflect any changes in your circumstances. Whether you're starting a family, buying a home, or advancing in your career, we ensure that your insurance remains relevant and adequate.

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The Importance of Early Insurance Planning

Securing personal insurance while you're young offers several significant advantages:

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Lower Premiums

Insurance premiums are generally lower when you are young and healthy. By obtaining coverage early, you can lock in these lower rates and save money over the long term.

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Comprehensive Coverage

Younger individuals typically qualify for more comprehensive coverage options. Early planning ensures that you have robust protection in place before any health issues or life changes limit your eligibility.

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Guaranteed Protection

Unlike other insurance types and companies once you get the insurance the insurance company cannot cancel your benefits or change when they will pay out a claim. By getting your insurance when you are young you are protecting yourself from changes to insurance company policies.

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Financial Security

Having personal insurance provides a financial safety net that allows you to focus on your personal and professional growth without the constant worry of unforeseen circumstances. It ensures that you and your loved ones are protected, no matter what life throws your way.

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