Life, loan and income protection basics

There are many different types of insurance available. Policies can now be created to offer a combination of benefits to best suit your specific needs and budget. That’s why it’s important to make sure you understand what each one does, to make sure it’s right for you.


Life insurance

Life insurance is probably one of the first types of personal insurance most of us think about. Although there may be variations, the main reason for having it is to provide your loved ones with an appropriate level of financial cover when you die. It gives you the peace of mind that those close to you can be cared for after you’ve gone.

  • You decide the amount of insurance that you require. Whether it’s a smaller amount to cover basic funeral expenses or a larger lump sum payment so that your family can pay off debts and maintain their current lifestyle.
  • Often life cover policies can be paid early if you are diagnosed with an illness that is likely to result in you dying within 12 months.


Income protection insurance

If you become unable to work through sickness or injury, income protection insurance can provide you with a steady stream of monthly income. You can also get cover for redundancy.

Depending on your occupation, there are different levels of cover. Some will continue to pay out if you can’t work in that specific occupation anymore. However, for certain occupations, the policy only activates if you are unable to work in any capacity.


Loan protection insurance

If you become ill, injured or are made redundant, loan protection provides cover for any loan repayments you may have, until you’re able to work again. These could be things like your mortgage, or a car or personal loan.

This kind of cover can help ‘tide you over’ at what can be a difficult time for you and your family. Having loan protection insurance also means that your loan balance can be reduced or paid off if you die.


Serious illness insurance

Whilst none of us wants to fall ill or have a serious accident, most of us would want to be financially covered if the worst were to happen. Serious illness insurance can provide much-needed financial help for you and your family, at a time when you may need it most. If you suffer a serious medical condition in accordance with your policy, you can receive a lump sum to help cover things like:

  • Replacing loss of your income
  • Reducing financial commitments, such as your mortgage
  • Medical expenses
  • Private nursing care
  • Loss of income if a family member needs to stop working


Total and permanent disability insurance

With total and permanent disability cover, you will receive a lump-sum payment if you’re unable to work again as a result of a serious illness or injury. Having cover would help relieve some of the financial stress and worry for you and your family, in having to cope with a major impact to your life and lifestyle. The money can be helpful in covering the many additional expenses that can be incurred including:

  • Private nursing care
  • A replacement income if a family member has to give up work to care for you
  • To cover costs involved in renovating and setting up your home to fit your changing needs

Don't forget:

As your life changes your insurance should too.

Review your insurance cover regularly, to make sure that you have the right level of protection. One of our ASB Insurance Managers can help you in selecting the right level of cover that you need. 

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Other helpful guides

The availability of insurance cover is subject to your application being approved. All applications are subject to individual consideration. Special conditions, exclusions or premium loadings may apply. An excess may apply for health insurance policies. For full details refer to the Policy Document which is available on request from any ASB branch. Life, health and disability insurance is underwritten by Sovereign Assurance Company Limited ("Sovereign"). None of ASB Bank Limited or its subsidiaries, the Commonwealth Bank of Australia, or any other company in the Commonwealth Bank of Australia Group, or any of their directors, or any other person, guarantees Sovereign or its subsidiaries, or any of the products issued by Sovereign or its subsidiaries.

Life, loan and income protection insurance Life, loan and income protection basics