If money is tight right now and you’re struggling to keep on top of your debt repayments, you are not alone. Several factors may have caused your finances to be strained, from the rising cost of living and inflation, to an unpredictable life event.
Having insurance is all about preparing for the unexpected. An unexpected life event can happen at any time and can take a significant toll on your finances. Insurance can give you the peace of mind that if disaster strikes unexpectedly, you have something to fall back on.
There are several types of insurance, from employment insurance to loan protection insurance, that can benefit you financially if the unexpected happens and your finances take a significant hit. With the right insurance, your finances can be protected, so you can keep on top of your bills should the need arise.
How Insurance Can Help
Insurance is there to protect you against unexpected life events, provided they fall within the terms and conditions of your policy. There are several types of insurance to cover various eventualities, from job loss to car repairs.
While there are several types of insurance, they work in similar ways. Insurance essentially works as a contract, in the form of a financial protection policy. This policy covers the risks of an individual due to unpredictable and unexpected circumstances.
You will pay a certain amount, known as a “premium” to the insurance company, which then provides you with insurance cover. The insurer will then cover you for losses subject to the terms and conditions of your policy, so it’s important you know exactly what you’re covered for before you claim. Your policy will also come with a “policy limit”, which decides the maximum amount that your insurer will pay out should you need to claim.
Employment Insurance
The Employment Insurance program provides temporary income support to unemployed workers. Workers can only receive benefits if they have paid premiums in the past year and if they meet qualifying and entitlement conditions. Self employed workers may also participate in the Employment Insurance and receive special benefits.
Other types of insurance
Here are just some types of insurance that may protect you and your family financially, should the unexpected happen:
Life Insurance
Life insurance offers your loved ones financial security should you pass away unexpectedly during the term of your policy. The aim of life insurance is to protect your family’s financial future, so there is less of a financial burden left behind.
Upon your death, your beneficiaries (those listed in your policy) would receive a lump sum, tax-free payment to help them maintain their living standards, as well as to pay for any extra expenses such as your funeral costs or debt. Life insurance may be particularly important to you if you have others who depend on you financially, like a spouse or children.
Critical Illness Insurance
If you were to become ill unexpectedly and could no longer work, critical illness insurance could cover the associated financial loss and whatever costs may come with your care, such as medical expenses and childcare. One potential pitfall to critical illness coverage is that only the medical conditions listed in your policy will be covered, so it’s important you check with the insurance provider exactly what is covered. Often, insurance providers offer life insurance with critical illness cover together under one policy.
Home Insurance
Home insurance saves you from having to pay out a large amount of money at once, often at a difficult time. As a homeowner, insuring your house can cover you for rebuilding costs in the event of damage or destruction, caused by things such as extreme weather conditions. Your home insurance policy may also cover you for accidental damage to a third party’s property.
Job Loss Insurance
Losing your job unexpectedly can leave you feeling anxious about how you’re going to manage financially, particularly if you have commitments such as credit card payments or a mortgage. Should you become unemployed involuntarily, job loss insurance can make specific debt payments on your behalf for a limited period of time.
It’s a temporary means to help you meet your debt repayments should you become unemployed. Those who are retired, voluntarily unemployed, self-employed or working on a temporary on contract basis will not qualify for job loss insurance. There may also be policy limits, such as a maximum monthly amount of debt payment that is covered – so make sure to check the limits of your policy.
Loan Protection Insurance
Loan protection insurance can help you when circumstances beyond your control cause you to be unable to pay your loan repayments on time. If you are unable to pay your loan payments due to illness or an accident that has led to a disability, loan protection insurance can offer you peace of mind.
This insurance can help you pay off your mortgage or personal loans if unforeseen circumstances such as an accident make it impossible for you to repay your debt. The cost of loan protection insurance varies by age as well as your credit history, and the amount of outstanding debt you owe.
Struggling financially? Reach out for professional support today
Are you finding your finances difficult to manage at the moment? Perhaps you’re struggling with debt or you’ve recently lost your job – whatever the circumstances, consulting a Licensed Insolvency Trustee can help you develop a plan to get your finances back on track.
Here at Allan Marshall & Associates, our team of professional Trustees are experts in all areas of debt management. We are here to listen. Financial guidance and credit counselling may be all you need to help you with your money management. With the right support, you can begin your journey to a brighter future. Contact us today.
