Personal Risk Insurance

It’s not something anyone likes to think about. But life’s uncertain. You might not always have the luxury of the income you currently have. You could fall sick. You could have an accident. But when that happens, you don’t have to eat into the wealth you’ve worked hard to create. That’s why a sound financial plan will help you create wealth and preserve it. Your financial adviser can help you structure your financial plan so that if you’re not able to work, you can still maintain your standard of living and keep your investments.

Your financial plan is all about helping you keep control of your wealth, so you can make the most of it when you retire. It should also ensure your family is taken care of when you’re no longer around to take care of them. Ultimately, your financial plan is about providing you and your family with peace of mind.

Risk insurance shifts the financial burden created by personal risks to insurers who can afford to cover them by pooling the premiums paid by their customers. It provides peace of mind that you and your family are financially secure as risk insurance may pay an ongoing income or lump sum if you can’t work because you’re temporarily or permanently disabled, or if you die.

Life Insurance

Life insurance can provide financial protection for your dependents if you die. The cost depends on the type of cover you choose. You should review your cover regularly to ensure you’re not under- or over-insured. The most appropriate policy is one that strikes a balance between how much premium you can afford to pay and favourable policy conditions. To decide how much cover you need, it’s important to consider:

your current assets and liabilities, especially the amount outstanding on your mortgage how much you’d need to maintain your family’s standard of living whether you may need to pay for a housekeeper or day care for your children your children’s school fees.

Life insurance can be used to repay debts, cover your dependants for the loss of your income and/or secure your business.

Total and Permanent Disability (TPD)

TPD is additional to life insurance cover. It pays a lump sum if you can’t ever work again because of illness or injury. TPD can be used to repay your debts, cover medical expenses, capital gains tax liabilities and cover your dependents for the loss of your income. The precise definition of TPD and the conditions that must be met to receive compensation vary considerably between insurance companies. So it’s important you understand the conditions under which the insurance company will pay a claim before taking out TPD cover.


  • Cover your mortgage or other debts.
  • Protect your business against loss of sales and profits.
  • Maintain business lines of credit
  • Provide an income stream to live on
  • Provide money for home modifications required due to an accident or illness.

Trauma (also known as Critical Illness or Living Insurance)

This type of insurance pays you a lump sum if you suffer one of the major health traumas specified in the insurance policy. Specified traumas typically include certain cancers, heart disorders, nervous system disorders, various accident conditions, specific organ disorders and loss of speech. Detailed definitions are contained in the product disclosure statement for the relevant insurance policy.


What if you suffer a serious illness or injury, but are not totally and permanently disabled? Your TPD cover does not apply and even if you have income protection cover to pay your general living expenses, it may not be enough to cover all the additional expenses associated with a serious illness or injury – eg medical bills. This is why Trauma Insurance is so important.

The benefits of trauma insurance include:

  • Pay for specialist medical attention.
  • Cover the cost of modifications to the home.
  • Avoid financial stress in recuperation.

Interested in speaking with a financial adviser?

Contact Capital Advice Partners on 02 8920 3488 or use the form on the right today.

Personal Risk Insurance

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