Life/TPD/IP/Trauma Insurance

Hi guys,

We recently bought our first IP, and we are just about to get insurances across the board.
So we are looking to get certain levels of cover which will keep us in safe hands with our PPoR and IP debt.

However, we are also looking to get another IP within 6-12 months, and hopefully a few more after that. So are there many costs involved with increasing your cover gradually (assuming you had level cover) as time goes on? How does it impact your premiums?

And also a question about level cover. You're obviously a bit more out of pocket than the stepped cover at first but then as time goes on, level cover starts to become cheaper. If you change your insurance provider after 10 years (or possibly increase/decrease your cover), do you have to start all over again? I'm always keen on changing my policy's (whatever that is) if there is a more competitive product out there but if you are with level cover, you really want to be there for the long term correct?. So in a way, do people often just go stepped cover as it's cheaper at the start, and then switch policies after a while?

Cheers,
Fitz

 

I have life, TPD and income protection insurance through my super fund, it was cheaper than the other quote I got and the premiums come out of my super not my cash in the bank. From memory they have a limited life span if you stop making contributions to your super, you'd have to check that, I'm away from home right now and can't look it up.

 

I'm level cover. I figured I need it forever, and the stepped quite quickly becomes prohibitive.
I have a mix through super and outside super.

I used a broker who made it clear for me at the time.
I need a couple of special extra things that made it a little trickier

Costs me a bomb, but my income is my most important asset for my family.

My trauma cover also renews - we learnt this the hard way, missing it twice with a family member when it wasn't covered the first time, and excluded for ever more, so no good on the second.

 

I am the same as @Bran with level cover and have the renewing part (I cant remember the terminology they use).

Like Bran said my wife and I income is required for our future at this stage in our life. If one of us was unable to work we would have to change our life plans. With the insurance our plans only change slightly.

 

I might check with a broker and get their thoughts!
Just did a quote for my wife and I with it coming to a decent amount, so just want to make sure we get the structure right from the get-go!

 

@Fitzy1903 If you are looking at a long term get leveled cover, if you are doing for a couple of years then stepped might be more cost effective.

 

Thanks mate.

Yeah, I think our circumstances are going to change quite a bit over the next few years - more IP's and kids in 3-4 years time. So might just go stepped for a few years and then once things calm down and we have a fixed plan, then we might transfer over to levelled.

 

I have $1.5Million Total Death, 1.5 Million Total Disability and Income protection covering 75% of 150K . I do it all via my Superannuation.

I also have 10K cash buffers for every investment property, and I have a significant amount of "insurance" provided by NRAS cash flow...

 

Euro - for your income protection within super, does that last till your 65? Or 2 yrs max?

 

These questions are why I have a mix - one covers one, the other, the other.
One has a 2 year wait, the other pays for 2 years
Other things within super are considerations such as declining payout as you age, and payments which stop at 65
My insurance is extra expensive as I have only a 30 day wait - next year I will hopefully have a bit of a buffer to use sick pay, self-insure and extend this wait. The premiums should come down significantly with a 60 day wait in comparison

 

65

 

Same as Euro 65, 2 years isn't worth it if I am unable to work.

 

I would look more at leveled if you are in it for long term.

The longer you wait for leveled the more it will cost overall. I think it is like 5 years is when level comes competitive at our age and after 10 years is cheaper then stepped.

See an insurance broker, I have one over here (Melb) that is good not sure if he can do insurance in other states but I would assume rules are similar. Obviously you don't get F2F contact like I get but he knows his stuff and helped explain exactly what we were getting and listen to what we want to do and put forward his recommendation. He then explained why and end of the day he would rather us have enough coverage without to much but if we wanted to do 1/2 the amount he is also okay as some cover is better than none.

To give you an example I thought for my life we would only need maybe 500k->1M as it would pay off the house and give a huge cash injection for my wife (and soon to be child). Well this changed after speaking with him to over 2.5M due to what we wanted incase something happened. Been a two years since we took up the insurance and haven't had to claim on it so guess it is a waste but you never want to claim on it but you are sure glad you have it when you do need to.

If you want the guys details PM me and I can reach out to him and see if he can do insurance in other states and if he can will forward you his details.