Life is for living to the fullest, but sometimes the world can have other ideas.
What would happen to your family financially if you were no longer there to provide income? It’s something we would rather not think about but is essential to plan for. Having insurance can provide essential financial support when your family needs it most.
But with most policies giving out dauntingly large lump-sum payouts, is there another way to ensure the best future for your loved ones? Yes, with Family Protection Insurance – a policy that gives peace of mind to your family members that they will be free of financial worries during difficult times and into the future.
What is Family Protection Insurance?
Family Protection Insurance is a life insurance that pays out a specified amount of income every month following the death of the policyholder. This monthly income benefit helps your family continue to pay regular expenses to keep their lifestyles or business on track.
How is it different from my other insurances?
Most life insurances pay out lump-sum payments to cover larger assets that could be at risk following the death of the policyholder. However, big amounts of money given to people who are going through tough times can be intimidating, not to mention it may not last as long as you’d hope.
With Family Protection your dependents receive a non-taxable benefit each month for a selected period of time – providing ongoing income, security, and support for the future. Periodic payments provide financial assistance for regular expenses such as mortgages, groceries, utility bills, and schooling – whatever helps your family keep their regular lifestyle going. This is similar to the way Income Protection or Critical Illness Insurance works, but that cover relates to loss of earnings due to illness or injury, not death.
What are the key benefits of Family Protection Insurance?
- Monthly income payment – Regular smaller payments Instead of a lump-sum provides long-term assistance and minimises lifestyle disruption for your family.
- Combine for full coverage – Matching Family Protection Insurance with lump-sum insurance such as Life Cover will provide both ongoing income and single payments to tackle larger debts that are left behind.
- Claim Reasons – Covers the death of the insured person due to a range of causes – whether from illness, accident, natural causes, or other means.
- Bereavement Support Benefit – This is an extra benefit that involves a lump-sum payment being paid out immediately after the policyholder passes away to cover funerals and family travel costs.
- Financial and Legal Advice – Reimbursement of financial planning or legal advice fees are available if needed as a direct result of a Family Protection Insurance claim.
- Counselling Benefit – This covers some of the costs of psychiatrist or psychologist consultations and treatments when they are directly linked to a main Family Protection Insurance claim.
- Parents Grieving Benefit – Additional benefit if the child of an insured person dies before the age of 21, including before birth but after 24 weeks gestation, resulting in a payment of $2,000 – $15,000.
A family of 5 from Auckland recently contacted us for advice on their insurance. With three children at primary school and both parents in full-time work, they wanted to secure their families’ lifestyle in the event of a tragedy.
With monthly mortgage repayments and regular outgoings in terms of bills and extra-curricular activities, the family smartly already had an Income Protection policy to protect from loss of earnings – but nothing to cover them if an adult passed away.
After a quick discovery session with us, we created a thorough financial plan together, including putting their minds at ease by setting up comprehensive Life Insurance and Family Protection Insurance policies. The family is now safe in the knowledge that not only are they on the right track financially, but they are also covered if anything unexpected happens.
To find out more about the different insurance options available to you and your loved ones, contact us and we’ll help find the plan that best suits you.