What types of insurance do I really need?

Insurance, nobody likes it, everybody needs it. It's one of those things where we need to protect our family in the event of anything untoward is happening to us. So if your partner was to pass away, got hit by something tragic like that, we just need to make sure that the mortgage is covered and we've got enough money to get ourselves back on our feet. So my rule of thumb is we want to insure around about 20 times the primary income earners salary. So if you've got a guy or partner or wife or anyone that you want to look at insuring, you want to be looking at 20 times their gross salary. So what does that mean? That means if you're in a position where you've got a partner who's earning 100 grand, you should be looking at $2 million worth of life cover. If you've got a partner who's earning 50,000, you should be looking at a million dollars worth of life cover. That's going to well and truly pay out your mortgage and give you enough money to get back on your feet with insurance. You can be paying for that outside of superannuation out of your own after tax money or you can be paying that inside of superannuation where your super contributions pay for the premium there. The difference is with superannuation insurance, that benefit of $500,000 or a million dollars is going to be taxed, whereas outside the super, the benefit is not taxed. So that's the key difference there between paying for your insurance premiums inside or outside super with your income protection. I really feel this is such a critical point where no one really insures their income with the same amount of discipline that they insure their car. I mean, what's the most important asset in your life? It's not your house, it's your income. Without your income, everything stops. Yet you insure your car, which is one of the biggest liabilities in your life that's dropping in value up to 70% in the first four years of a brand new car. So you're insuring a liability, but you're not insuring an asset. So your income is just this machine that keeps spitting money in month after month, month after month. You want to insure that machine. You are that machine there. So your income protection can be paid for once again through your superannuation fund or it can be paid for outside of super. The benefit of outside of superannuation is, is you've got a tax deduction on that premium. So if Your premium is $100 per month for your income protection, you'll be getting 20, 30, 40 cents in the dollar back from the tax department purely simply because you're taking care of your financial future and the government rewards that there. So income protection critical for any single person who's earning an income and that household revolves around that income. Please implement that. And life insurance, make sure you've got 20 times the income that your number one earning spouse is generating each year. There's also another insurance called trauma insurance. Now this is the most claimed upon insurance. It covers for all those nasties where you don't die. So for example, you suffered a cancer or a stroke or a heart attack, but you're still alive, you survived that. Trauma insurance pays a lump sum. It cannot be paid for by a superannuation fund. It has to be paid for outside of super with after tax dollars. I think that's probably the third most important of all the insurances and you don't probably need as much cover. I'd literally love for you to have your whole mortgage amount covered by the trauma insurance. So if you were to suffer a cancer, stroke, heart attack, then your mortgage was paid out. It is very expensive cover, but that's because it's so claimed upon. And so as a result the insurance company prices it. What's the risk of them paying out? With trauma insurance, the risk of them paying out is very, very high. Therefore the premiums are very, very high. But you always get what you pay for in life. So life insurance, non negotiable income protection, non negotiable trauma insurance, a nice luxury, I really feel if you can afford it, to buy that peace of mind for you and your family.