People would probably take the greater parts of their lifetime to accumulate their personal wealth. It is therefore critical that they would not want to lose all there assets. What can they do to prevent this from happening?
After assessing the situation it was felt that the most effective way for people to protect their investments is by having personal insurance in place. Such products as income protection insurance, life insurance, total and permanent disability, trauma cover and even landlord insurance ensure that people can continue to build their wealth even when disaster hits.
"It's great to build up your investments but one of the most important things we have got to do is protect those in the event that something happens to us," says senior adviser with financial services company William Buck, Janine Williamson. "Your most important asset you have is your ability to earn an income."
Ms Williamson says the most important personal insurance to have in place is income protection, which replaces up to 75 per cent of your income in the event you can no longer work due to sickness or injury.
The cost of income protection insurance depends on things like age, the type of work you do, gender and general health.
Ms Williamson says most people can now arrange income protection insurance through their superannuation fund, which means they do not have to find the money for premiums each month as it is taken directly out of their super and treated as salary sacrifice.
"A lot of people know they have to have insurance but at the end of the day they don't want to pay the premiums," she says, which means the superannuation alternative is appealing.
People can also use their super fund to obtain life insurance, which provides a lump sum to dependents if the policy holder dies.
Total and permanent disability insurance provides a lump sum benefit if someone is physically never able to work again.
"The key to protecting your investments is protecting yourself," Ms Williamson says.
"Building up all these investments is great but if something happened to you that you couldn't work and had no protection, you would have to sell those investments and then at a lower price as it would be on the basis of a forced sale."
Another type of insurance available is trauma insurance, which provides a lump sum if a person suffers from a specific illness listed in the policy, such as cancer or a heart attack.
Carolyn Majda from Terri Scheer Insurance Brokers says landlord insurance is also important to protect property investments.
"Even the most fastidious tenant is able to damage a property, whether accidental or otherwise," she says.
"This can be extremely costly for the landlord in terms of repairs and the loss of rental income."
Landlord insurance covers things such as malicious or accidental damage by a tenant, loss of rental income such as when repairs are required or a tenant absconds, and legal liability. Ms Majda says loss of rental income and malicious damage are the two biggest areas of claims for policy holders.
"If you're not insuring your investment property, you're not considering the risk involved in having somebody you don't know living in your house," she says.