What is Life insurance, most of us have and or are familiar with insurance for your home or car, but many are still uncertain about insurance for your Life.

Life insurance can be divided into four areas. These include Life Insurance, Total & Permanent Disability Insurance, Trauma Insurance and Income Protection Insurance. Similar to home or car insurance, Life insurance financially protects some of your most important assets you and your family.

Life insurance can be paid for on a monthly, quarterly or annual basis and if a certain event is triggered the insurance company could provide you or your family with a lump sum payout or monthly income in the event of illness, accident or death.

The cost of insurance varies due to your age, occupation, health, smoking status and sex.

Life insurance – pays a lump sum on your death or the diagnosis of a terminal illness, generally paid to your nominated beneficiary for the purpose of meeting outstanding debts including home loans and personal loans or to provide an income stream to a dependent or even schooling fees.

Trauma insurance- pays a lump sum if you suffer or are diagnosed with one of many specific conditions such as heart attack, stroke or cancer. The purpose of this insurance is to provide financial support and may give you the choice to reduce your working hours, provide treatment or rehabilitation, reduce debt or just take some time out.

Income Protection insurance- provides an income of generally up to 75% of your taxable earnings if you are unable to work due to illness or injury. Premiums vary depending on occupation, smoking status and age and are generally tax deductible.

Total and Permanent Disability insurance- pays a lump sum if you are unable to ever work again due to illness or injury. Similar to Life insurance proceeds from this insurance could be used to pay out home loans, provide and income stream and in this case provide for medical and rehabilitation expenses.

What is Life insurance is an important question asked by many, it may be worth speaking to a licensed insurance adviser who can tailor advice based on your individual circumstances.