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Life Insurance Coverage At The Time of Natural Disasters

Last modified: 19 Feb 2013

Does Life Insurance Protect People Against Natural Disasters?

Although it is possible to partially prepare yourself for natural disasters such as cyclones, earthquakes and floods by keeping adequate supplies in your store room; it is important to have additional protection in case your house is damaged or you are left financially unstable due to such natural disasters. Personal insurance plans can protect you against financial problems that may occur due to natural disasters, however; to be protected you have to ensure that your policy offers cover for a range of natural disasters. Depending on a few factors such as the benefits purchased and the type of insurance plan, you may be protected against 1- 5 disasters. If you want to opt for additional protection or protection against a specific kind of natural occurring disaster then you may have to purchase this benefit separately for a nominal cost.

 

Why Should I Read the Fine Print in the Life Insurance Contract?

The product disclosure statement includes details such as the terms of the policy, the situations in which you are protected and the compensation amount you will get. The product disclosure statement also contains details about the fee structure, exclusions and terms you should be aware of. The fine print usually includes exclusions and terms that may exclude you from getting a compensation payment hence it is important to read these terms before you purchase a policy. In addition, it is important for you to review your policy along with these terms once a year especially if you renew the policy, upgrade or downgrade the policy and make any changes to the plan.

 

What are Your Options if You Do Not Opt for Life Insurance?

If you do not have insurance then you can protect yourself by preparing for the disaster or disasters that affect your area the most. For instance, if your area is prone to cyclones then fitting in strong windows that will protect your house or fitting in strong doors and bolting down furniture may be an ideal move for you. Keeping adequate supplies in the supplies closet, keeping a first aid kit handy and a survival kit ready for disasters are a few others way to protect yourself and your family.

 

Can I get Help from the Government?

If you do not opt for insurance plans to protect yourself and your family from natural disasters then you may have to rely on help from the government. While the Australian government does offer help to people who have suffered due to a disaster, this help is usually limited and not adequate for a family of 4 to survive and rebuild their lives. Due to this reason, people usually have to rely on their own assets or insurance to help them rebuild their lives after they experience a traumatic incident such as a cyclone. If you have funds kept aside for a rainy day then you may be forced to dip into these funds to rebuild your life after floods, tornados, cyclones or other natural disasters. If you have assets such as a property then you may be able to sell it depending on the market position.

 

Who Must Purchase Insurance Against Natural Disasters?

People who live in areas that are prone to natural disasters should not only prepare their houses and themselves for any situation; but should also consider purchasing a good personal insurance and home owner’s insurance plan. If you rent a house then you may believe that you do not need insurance, but the truth is that, you still need insurance just a different type. While purchasing a home owner’s insurance is not needed in your situation, you will still need insurance to protect the contents in the house and your possessions. If you are the primary bread winner or the family or if you have dependants such as young children, older parents, an unemployed spouse or pets then you should get insurance that protects you against at least the common types of natural disasters that affect your area.

While taking a policy with maximum coverage may seem expensive at first, if you are forced to file a claim in the future then you will recover the cost of the policy and even get additional compensation payments. The total amount of compensation you receive will depend on the type of cover selected, type of benefits selected and the total compensation amount. Anyone who has expensive possessions or rare possessions that are hard to replace without financial help should consider getting a good home owners insurance plan or home contents insurance plan to ensure that they don’t suffer a financial loss after a fire, floods, tornados, cyclones, bush fires or any other natural disaster.

 

Why Opt for Home Owners Insurance?

Home owners insurance can protect you against financial loss you may face due to fire, floods or other natural disasters. Keep in mind that home owners insurance plans usually provide protection against fire due to faulty wires, if you want protection against fire due to a bush fire or any other problems then read the terms of the contract and contact the insurer to ensure that you have a policy that protects you adequately.

 

Conclusion

If you have a family that relies on you then it is important for you to be protected either by accumulating assets for a rainy day or by purchasing a life insurance plan that protects you adequately at all times. The cost of insurance plans can range from $5 – $30 a month and the benefits you get will depend on the cost of the plan. If you are looking for maximum protection against natural disasters, then make sure that you opt for a policy that protects you against at least 5 disasters such as bush fires, floods, cyclones, tornados and earth quakes. The type of cover you purchase and the benefits you opt for should depend largely on your needs and requirements, not only your budget. Remember monthly insurance premiums may cost you as less as having a cup of coffee in a restaurant and these plans can ensure that you and your family stay protected at all times.



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