Disaster-proof your finances

The far-reaching impact of COVID-19 has shown us that the truly unexpected does happen. And while you can’t predict certain disasters, you can plan to help protect your financial future.

Sometimes a disaster, like a serious illness, can hit without warning. But with good preparation, you can take the sting out of it and put steps in place that can help you get life back on track.

In business, this would be called a business continuity plan or a disaster recovery plan – things that most companies have. The government has similar plans in place to protect the nation’s health and economy in a crisis.

So why not take the same approach to your own finances? You can put measures in place – things like income protection, life insurance and emergency funds – to help make sure that life goes on, and your family is protected, even when things go wrong.

To get you started, here’s a checklist of things you might want to consider when creating a disaster-proof financial plan.

1. An emergency fund

Disasters can be expensive, so it’s a good idea to have some money put aside for unexpected costs, or to cover short gaps in your income. Moneysmart advises saving enough to cover your expenses for three months, but you can work up to that amount by putting a little aside each week or month.

2. Insurance

Insurance can give you an extra layer of defence against the unexpected, so you won’t be relying on just your savings. Of course, it’s something you hope you’ll never have to use, but it’s good to know that it’s there for you when you need it most.

Just like you insure your car and home – it’s worth considering insuring yourself. And there’s a range of insurance options to help protect you against whatever might come along. Some key insurances to consider are: 

  • Health insurance –helps cover medical costs if you need treatment for an illness or injury.
  • Income protection – provides an income if you’re unable to work because of an injury or illness. It could help you to keep up with your bills and provide for your family, for a period of between six months and five years. Some policies even cover you for involuntary redundancy if you lost your job.
  • Life insurance – provides for your family if you were to pass away in an accident or from an illness. You have the option to receive a lump sum payment, or choose a payment frequency to suit you, to help maintain your family’s lifestyle and financial security.

3. Keep your documentation safe

There are all kinds of different disasters, and some might limit your access to your home. Australian Red Cross recommends creating a plan for this situation, which includes storing copies of your important documents outside of your home – for instance, land titles and mortgages, or insurance documents.

4. Appoint a power of attorney

If you’re unable to make your own financial decisions, you can choose to appoint a power of attorney. This can be done by signing a legal document known as an ‘enduring power of attorney’.

There’s a similar document used to appoint someone to make medical decisions for you if you’re unable to, called a ‘medical enduring power of attorney’.

5. Prepare a will

No one likes to think about the worst-case scenario, but if you were to pass away, you would want to make it as easy as possible on your family financially. A will lists who you would like your wealth or property to go to in this case.

To make this easier to prepare, we provide a free will kit when you take out a Virgin Life Insurance policy.

We know life emergencies aren’t the nicest of things to think about. Let’s face it, spending your free time getting your insurance and documents sorted is hardly going to top your ‘most fun things to do’ list. But by putting plans in place you can help ensure unexpected events don’t turn into an ongoing disaster. With Virgin Income Protection and Virgin Life Insurance, you’ll have more than just protection for the unexpected – you’ll have peace of mind.

Imagine if we’d seen COVID-19 coming – and prepared for it. How different our world would be.

  • Important information

    Virgin Income Protection is available to Australian Residents between 18-60 years of age. Applications subject to acceptance. Cover limits, exclusions and conditions apply. Premiums vary depending on personal circumstances and generally increase with age and cover. Please read the Product Disclosure Statement for further information.

    This information is of a general nature only and does not take into account your personal financial situation, needs or objectives. For this reason, you should consider the appropriateness of this information, having regard to your personal financial situation, needs and objectives as well as the Product Disclosure Statement and Financial Services Guide before deciding whether to buy or continuing to hold this product. View Privacy & Security information.

    Virgin Income Protection and Life Insurance are promoted by Virgin Money (Australia) Pty Limited ABN 75 103 478 897, authorised representative No 280884 of Virgin Money Financial Services Pty Ltd ABN 51 113 285 395 AFSL 286869, and distributed by TAL Direct Pty Limited ABN 39 084 666 017 AFSL 243260. Policies and claims administered under agreement with the insurers, TAL Life Limited ABN 70 050 109 450 AFSL 237848 and for Involuntary Unemployment Cover, St Andrew's Insurance (Australia) Pty Ltd ABN 89 075 044 656 AFSL 239649.

    For information about Virgin Money, TAL & St Andrew's and the Income Protection and Involuntary Unemployment insurance products referred to in this article, please see the Product Disclosure Statement and Financial Services Guide.