If you’re like most people, you probably get your insurance renewal each year, glance at the premium, maybe wince a little… and move on.
But here’s the problem: most people don’t actually remember what their insurance covers do.
And when premiums start creeping up, that’s when the dangerous questions begin:
“Do I even need this?”
“What does this one actually do again?”
This guide is designed to fix that. Think of it as a simple reference you can come back to when reviewing your cover or preparing to speak with your adviser.
1. Life Insurance
This is the simplest one.
If you pass away (or are diagnosed with a terminal illness), your life insurance pays out a lump sum to your chosen beneficiary.
The key thing most people overlook? Ownership structure.
If your policy is owned personally, the payout goes to your estate and may be delayed through probate. If structured correctly (for example, with a partner as joint owner), it can be paid out much faster to the right person.
There’s also a variation called family protection (or survivor income), which pays a monthly income instead of a lump sum often useful for families with young children.
2. Total Permanent Disability (TPD)
TPD pays a lump sum if you become permanently unable to return to work.
This is about replacing a lifetime of lost income not just covering short-term costs.
One of the biggest mistakes here is not updating your occupation rating. If you’ve moved from a high-risk job (like construction) to a lower-risk role (like office-based work), you could be overpaying.
Also check your structure:
- Accelerated: reduces your life insurance if you claim
- Standalone: keeps both covers separate (more comprehensive, but more expensive)
3. Trauma Insurance (Critical Illness Cover)
Trauma insurance pays a lump sum on diagnosis of a serious illness most commonly cancer, heart attack, or stroke.
That’s a key distinction:
It’s not about whether you can work. It’s about being diagnosed.
This is designed to reduce financial stress during recovery covering time off work, treatment costs, childcare, or anything else you need.
A common issue? People forget to claim.
It sounds surprising, but many people simply don’t realise they’re eligible after a diagnosis and miss out on significant payouts.
Also worth checking:
- Whether your cover is standalone or linked to life insurance
Whether you have kids’ cover included (often automatic and valuable)
4. Income Protection
Income protection replaces your income if you’re unable to work due to illness or injury.
Typically, you can insure up to 75% of your income, paid monthly.
There are three key levers that affect cost:
- Benefit period: 2 years vs 5 years vs to age 65/70
- Waiting period: how long before payments start (e.g. 4 weeks vs 13 weeks)
- Monthly benefit amount
A practical example:
If you now have 3–6 months of savings, you might extend your waiting period to reduce premiums without taking on unnecessary risk.
Also, check whether your policy is:
- Agreed value or indemnity
- Paid gross or net
- Eligible for tax deductions
These details matter more than most people realise.
5. Health Insurance
Health insurance doesn’t pay you money it pays your medical bills.
Its value comes down to two things:
- Speed: faster access to treatment vs public waiting lists
- Access: specialists and non-funded treatments
One of the biggest cost levers here is your excess.
If you took out cover years ago with a $0 excess but now have savings, increasing your excess (e.g. to $1,000 or $2,000) can significantly reduce premiums.
Final Thought: Review, Don’t Ignore
Insurance isn’t something you “set and forget.”
Your income changes. Your family changes. Your risk changes.
Yet most people leave their policies untouched for years overpaying in some areas and underinsured in others.
At a minimum, your review should cover:
- Ownership structure
- Occupation classification
- Waiting periods and benefit levels
- Exclusions and loadings (which can sometimes be removed)
Because the goal isn’t to have more insurance.
It’s to have the right insurance, structured properly, at the right cost.
Tim Ellis - Financial Adviser
Ready to start the conversation? The FoxPlan team would love to help you prepare with clarity, confidence, and a plan built to last for years to come.