Review Your Personal Insurance Each Year: Life, TPD, Income Protection and Trauma — 2026 Guidede

Last Updated: September 28, 2026

Personal insurance is designed to protect you and your family against some of life’s biggest financial risks.

For many Australians, that means four key types of cover:

Your insurance needs are not fixed.

Your mortgage may reduce. Your income may increase. Children may become financially independent. You may start a business, change employment or build enough investments that you no longer need as much cover.

That is why personal insurance should form part of your broader financial plan and be reviewed as your circumstances change.

An annual review is a useful discipline — but you should not automatically change or replace a policy simply because another policy appears cheaper or newer.

Why Review Your Personal Insurance?

Insurance is designed to protect your financial position if something goes seriously wrong.

The amount of cover you needed when you were 35 may be very different from what you need at 45, 55 or approaching retirement.

A review should consider:

The objective is not necessarily to increase your insurance.

It may be to reduce unnecessary cover, restructure existing cover, maintain what you have or identify a gap.

The Four Key Types of Personal Insurance

Life Insurance

Life insurance is generally designed to provide a lump-sum payment if you die.

For a family, the purpose may be to provide enough capital to:

The amount required will depend on your circumstances.

As your mortgage reduces and your investments grow, your required level of life insurance may also change.

For example, someone with a $1 million mortgage, two dependent children and limited investments may have a substantially different insurance requirement from someone approaching retirement with no debt and significant financial assets.

Total and Permanent Disability Insurance

TPD is designed to provide a lump sum if you meet the policy’s definition of total and permanent disability.

This is an important distinction.

TPD is not simply insurance for being unable to work for a period of time.

The definition and eligibility requirements depend on the policy.

TPD can potentially help with:

When reviewing TPD, don’t simply look at the amount of cover.

Review the definition of disability and the policy terms.

Different policies can have different definitions and conditions for payment.

Income Protection Insurance

Your ability to earn an income may be your most valuable financial asset.

For a professional earning $150,000 a year, for example, the future income stream can be worth considerably more than the person’s current savings or investments.

Income protection is designed to provide an income benefit when illness or injury prevents you from working, subject to the policy terms, waiting period and benefit period.

When reviewing IP, consider:

Your income may have increased significantly since the policy was established.

Conversely, if you have changed careers, reduced your working hours or are approaching retirement, the original level of cover may no longer be appropriate.

Trauma Insurance

Trauma insurance is designed to provide a lump sum if you suffer a specified medical condition and meet the policy’s definition.

Depending on the policy, conditions may include certain cancers, heart attacks, strokes and other specified medical events.

The important word is specified.

Trauma insurance does not cover every illness or medical condition.

The exact conditions, definitions, severity requirements, exclusions and waiting periods depend on the policy.

A trauma benefit may provide financial flexibility at a difficult time, potentially helping with:

The value of trauma insurance therefore needs to be considered in the context of your broader financial resources and the level of financial disruption a serious illness could cause.

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Life Events That Should Trigger an Insurance Review

You do not need to wait for your annual review if something significant changes.

Consider reviewing your personal insurance after:

The underlying question is simple:

Has the financial risk I am trying to protect against changed?

How Much Life Insurance Do You Need?

There is no universal amount of life insurance that is appropriate for everyone.

A useful starting point is to identify the financial obligations and resources that would remain if you died.

Consider:

Debts

Future financial needs

Assets available

A simplified calculation might look like:

Financial consideration Example
Mortgage and other debts $700,000
Money for Family – $75,000 for 15 years $800,000
Other identified needs $100,000
Total estimated requirement $1,600,000
Existing life/TPD cover $600,000
Superannuation – available upon death $200,000
Potential shortfall $800,000

This is only an illustration.

A proper assessment should take into account your actual income, expenses, assets, liabilities, dependants, superannuation and other resources.

The objective is to determine the financial need, rather than choosing an arbitrary multiple of salary.

Don’t Forget Your Superannuation

Many Australians have personal insurance through their superannuation.

Depending on the fund and policy, this may include:

Superannuation insurance can be convenient because premiums may be deducted from your super balance rather than paid from your bank account.

However, there are several issues to consider.

Check how much cover you actually have

Default cover may not be enough for your circumstances.

Alternatively, you may have accumulated multiple super accounts and unknowingly hold overlapping insurance.

Check whether the cover is fixed or units-based

Some policies provide a specified dollar amount of cover, while others provide units of cover where the value of those units can change with age.

Check the definitions

Don’t compare policies based solely on the amount of cover.

The definition of TPD or other insured events can be just as important.

Consider the impact on your super balance

Insurance premiums paid from super reduce the amount remaining invested for retirement.

The appropriate balance between insurance protection and retirement savings therefore needs to be considered.

Don’t Automatically Cancel Existing Insurance

This is one of the most important points when reviewing personal insurance.

A newer policy may appear cheaper or offer a different benefit, but replacing an existing policy can have consequences.

A new application may involve:

Your health and circumstances may also have changed since the original policy was issued.

For this reason:

Do not cancel an existing policy simply because you have applied for a new one.

If replacement is being considered, the existing policy should generally remain in place until the new cover has been properly assessed and accepted and the implications of the change are understood.

In some circumstances, an older policy may contain terms that are valuable and difficult to replicate.

Inflation and Your Insurance Needs

Inflation does not affect every type of personal insurance in the same way.

For Life and TPD insurance, a fixed sum insured can effectively become less valuable over time as the cost of living increases.

For Income Protection, your insured benefit should be considered relative to your current income and the policy’s terms.

Some policies may provide indexation or other mechanisms to adjust benefits, while others do not.

The important question is:

Does the level of protection still make sense relative to your current financial position?

Rather than automatically increasing insurance every year, consider whether your actual financial exposure has changed.

What Happens as You Approach Retirement?

Your insurance needs can change significantly as retirement approaches.

For example, you may have:

This may reduce the need for some types of cover.

Income protection in particular needs careful consideration as you approach retirement because the value of protecting employment income may decline as your planned retirement date approaches.

Life and TPD requirements can also change as your accumulated assets increase and financial dependants become independent.

The appropriate approach is to review the insurance strategy alongside your retirement plan rather than simply continuing the same level of cover indefinitely.

Business Owners Have Additional Insurance Considerations

Business owners may have risks that employees do not.

Your financial plan may need to consider:

Personal insurance and business insurance are not necessarily the same thing.

For example, a business may require separate arrangements to address the financial consequences of a key person’s death or disability.

If you are a business owner, your financial adviser, accountant and solicitor may all have a role in considering the appropriate structure.

Beneficiaries and Ownership Matter

Insurance should not be reviewed only by looking at the amount of cover.

Also consider who owns the policy and who receives the benefit.

Depending on the policy and ownership structure, the treatment of proceeds can differ.

For life insurance held through superannuation, the payment of a death benefit is governed by superannuation rules and the fund’s governing arrangements.

Your beneficiary nominations should therefore be reviewed as part of your broader estate and superannuation planning.

Veyron does not prepare wills. Estate-planning documents should be prepared with an appropriately qualified solicitor or estate-planning lawyer.

Your Annual Personal Insurance Review Checklist

A useful annual review can be relatively simple.

Review area What to consider
Life insurance Is the sum insured still appropriate?
TPD Does the amount and definition still meet your needs?
Income Protection Does the benefit reflect your current income and occupation?
Trauma Is the level and policy definition still appropriate?
Super insurance What cover do you have through each super fund?
Debts Have your mortgage and other liabilities changed?
Income Has your income increased, decreased or changed structure?
Dependants Who currently relies on your income?
Assets Have your savings and investments increased?
Occupation Has your occupation or employment changed?
Business Have your business interests or liabilities changed?
Beneficiaries Are your nominations and broader estate-planning arrangements current?
Premiums Are the premiums sustainable and appropriate for the benefit provided?
Policy terms Have you checked definitions, exclusions, waiting periods and benefit periods?

Personal Insurance Is About Protecting Your Financial Plan

Insurance is not an investment.

It is a way of transferring particular financial risks to an insurer in return for a premium.

The right amount of insurance therefore depends on the financial risk you are trying to protect against.

Too little cover can leave a significant financial gap.

Too much cover can mean paying premiums for protection you no longer need.

And replacing an existing policy simply because another policy appears cheaper can create risks of its own.

The objective is to find an appropriate balance between protection, affordability and your broader financial plan.

Frequently Asked Questions

How often should I review my personal insurance?

An annual review is a useful discipline, particularly for checking your cover, premiums, policy ownership and beneficiaries.

However, you should also review your insurance when your circumstances materially change.

A new mortgage, child, career, business, significant income change or approaching retirement can all warrant an earlier review.

Do I need Life, TPD, Income Protection and Trauma insurance?

Not necessarily.

Each type of insurance protects against a different risk.

Life insurance primarily addresses the financial consequences of death. TPD addresses certain permanent disability risks. Income Protection addresses the loss of employment income due to illness or injury, subject to the policy terms. Trauma provides a lump sum for specified medical conditions.

The appropriate combination depends on your circumstances.

Is insurance through superannuation enough?

It may be, but default insurance should not automatically be assumed to be sufficient.

Review the amount of cover, policy definitions, premiums, ownership, exclusions and how the premiums affect your retirement savings.

Also check whether you have insurance across multiple super funds.

Should I cancel my existing insurance if I find a cheaper policy?

Not without understanding the consequences.

A new policy may involve fresh underwriting, different definitions, exclusions, loadings or other changes.

You should generally ensure replacement cover is accepted and understand the differences before cancelling existing cover.

How much Life insurance should I have?

There is no standard amount.

The calculation should consider debts, future income requirements, dependants, existing investments, superannuation and other available resources.

The appropriate level can change substantially throughout your working life.

Is Income Protection the same as TPD?

No.

Income Protection is generally designed to provide an ongoing income benefit when illness or injury prevents you from working, subject to the policy’s terms.

TPD generally provides a lump sum when you meet the policy’s definition of total and permanent disability.

They protect against different financial risks.

Do I need Trauma insurance if I already have TPD?

Possibly, because they serve different purposes.

TPD generally relates to permanent disability as defined by the policy.

Trauma insurance generally responds to specified medical conditions when the policy’s definition is met.

Whether both are appropriate depends on your financial circumstances and the risks you want to protect against.

Review Your Personal Insurance with Veyron

Your insurance should support your financial plan, not sit separately from it.

At Veyron, we look at personal insurance in the context of your broader financial position — including your income, debts, superannuation, investments, dependants, retirement objectives and cash flow.

The objective isn’t simply to sell more insurance.

It is to understand:

What financial risks would create the greatest problem for you and your family, and how much of that risk should you insure?

We can review your existing Life, TPD, Income Protection and Trauma cover, identify potential gaps or unnecessary cover, and explain the options available to you.

If changes are recommended, we can also consider the implications of replacing existing cover before you make a decision.

Is Your Personal Insurance Still Right for You?

If you have not reviewed your personal insurance recently — or your income, debts, family circumstances, superannuation or retirement plans have changed — it may be worth reviewing your cover.

Talk to Veyron about reviewing your personal insurance as part of your broader financial plan.

Get in touch with Veyron

Boring money. Exciting life.

General information only. This article does not take into account your objectives, financial situation or needs and is not personal financial advice. Insurance policies differ significantly in their definitions, exclusions, waiting periods, benefit periods, premiums and other terms. Before changing or cancelling an existing policy, consider the relevant Product Disclosure Statement and obtain appropriate personal financial advice. Tax treatment can also depend on the type of policy, ownership and individual circumstances.

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