Our first thought is usually to be able to pay out our mortgage so we know that we can “beat the banks” and keep our home.
But there are many other needs including abnormal medical expenses, the possible need to boost retirement savings, reduce business debt or personal loans and so on.
It’s essential to look carefully at how much you will need to at least give yourself breathing space and time to recover without the anxiety of debt around you.
As a guide, your trauma insurance cover should at least allow you to resolve all or a substantial part of your home mortgage.
It is then preferable to provide for abnormal expenses such as:
- Medical expenses over and above health insurance benefits
- The cost of modifying your home
- Carer costs
- Travel for treatment, especially if you live in a rural area
- Compensation for loss of work capacity and income
- Boosting retirement savings
- Loss of contribution to your business activity, if you are a business owner