Tag Archives: protection

Here’s why you need income protection

Your ability to earn an income is usually one of your biggest assets, so why not protect it?

Income Prot

A sudden illness or injury can keep you from working and leave you in financial difficulty. You may get help from a worker’s compensation payout or personal savings, but are they enough to help you meet your expenses and financial obligations?

Taking out an income protection (IP) plan may help provide peace of mind that you’ll be able to meet your financial responsibilities and focus on recovering. IP cover may provide a monthly income while you’re unable to work as a result of illness or injury. It generally replaces up to 75 per cent of your income for a set period of time.

Standalone or through super?

Getting your IP cover through your superannuation fund may be a good idea if you want to avoid paying for your insurance out of pocket. But keep in mind that the policies offered through super may not cover all your financial obligations for an extended period of time.

A standalone IP policy may provide more adequate coverage. It may also offer you tax benefits – IP premiums are usually tax deductible when you fund your cover outside super.

Making your policy affordable

If cost is a concern in taking out a standalone plan, there are a few ways you may be able to make your premiums more affordable. One of them could be choosing a longer waiting period before you receive benefits after being unable to work due to illness or injury. Generally, the longer you wait, the lower the premiums you have to pay.

Opting for indemnity cover may also help you keep your insurance costs down. You’ll have to choose between indemnity and agreed-value cover for your IP plan. Under an indemnity policy, your insurer bases the monthly benefit you would be paid on your income at the time you make a claim. For an agreed-value policy, the benefit is based on your income when you apply for coverage. Premiums for indemnity cover are usually lower than for an agreed value policy.

But indemnity policies may vary among providers, so speak to your adviser about which cover may suit you. Your adviser may also help you tailor your plan to meet your income protection needs.

Are you a Key Person?

Key-person insurance is Protection for your business

How would your organisation cope if something happened to a key person?

Unexpected events can play havoc not only with people’s lives but also with businesses.

However, business owners are often so busy they don’t stop to consider the true cost of the loss of a key employee, business partner or even themselves.  Eeeek!

The knock-on effects may include disruption to other staff, missed opportunities, delays or penalties for late delivery of projects, lost revenue, increased expenses, significant costs to find and train a suitable replacement, loan repayment and even loss of the business.  Ouch!

What is key-person insurance?

Key-person insurance protects a business’s financial position against the significant impact of a traumatic event such as the death or disablement of a key person.

A key person may be an employee, owner or an individual whose contribution to the business is significant.

This cover is not a specific kind of insurance but the application of life insurance to protect against key-person risk. It can be used with buy/sell life insurance (also known as business succession insurance) which covers the change of ownership if an owner dies or becomes incapacitated.

The benefits

Often a cash injection to an affected business may keep a bad situation from becoming worse or even catastrophic. The insurance proceeds may be used to:

  • minimise or eliminate the potential loss of revenue, sales or profits
  • help cover the often significant costs of finding or training a replacement
  • service or repay any debts that are called in
  • cover the impact of a writedown in the goodwill of the business
  • provide needed liquidity
  • help keep staff and maintain essential supplier relationships.

Are there alternatives?

A business may have other strategies to help manage their risks, including asset sales, promoting staff or reallocating workloads even temporarily, using profits, borrowing more, or drawing down existing loan facilities.

However, insurance is the only practical alternative where a business doesn’t have the capacity to cover its risks.

If you want to know more and see if it can apply to your business, why not give me a call? 07 5593 0855.

Do you insure your biggest asset?

It’s a sad fact that most Australians are dangerously under-insured.  And It may just be high time you reviewed your levels of insurance protection!

Take the example of Matt.  He is a clean-living 53-year-old who exercises regularly, doesn’t smoke, enjoys a healthy diet and only indulges his love of good wine at the weekend.

Yet things changed suddenly for Matt last year when he awoke one night to find he couldn’t breathe. His wife called for an ambulance and he was rushed to hospital, where he was taken into life-saving surgery following a heart attack.

After waking from his operation, Matt was in shock. He knew there was a family history of heart disease, but had gone to great lengths to prevent the onset of the illness and had definitely not properly thought through how his family would cope without him.

During recovery, Matt reviewed the insurance component of his super and discovered that in the event of his death his family would receive just $300,000, which would barely pay off the mortgage. He hadn’t taken into account daily living expenses, car loans, and his daughters’ school fees, his wife’s low income or their inadequate savings.

Fortunately for Matt, his story is a positive one. Now in better health and back at work, he has spoken to a financial adviser and taken out additional life insurance, albeit at a significant premium following the heart attack. He and his adviser are looking into critical illness cover, which would pay out a lump sum should he suffer another sudden illness, although he’s likely to now have a coronary exclusion.

Unfortunately, in Australia, Matt’s story is not uncommon.  Surveys have shown Australia has much lower levels of insurance than other developed nations including the United States and United Kingdom [1]. The required level of life insurance is now about $680,000, while the typical default cover is around $258,000 – a significant gap [2].

Maybe it’s time to ask… could your family make ends meet if you were unable to work, suffered a serious illness or died? Here are some things you should consider:

  • Ongoing Mortgage or rent payments
  • Daily living expenses – food, bills, transport, utilities, insurances
  • Childcare, school and university fees, text books and accommodation
  • Other expenses – house repair costs, medical expenses, personal health & grooming, replacement of white and brown goods

Make an appointment with your financial adviser to discuss your insurance needs and ensure you are adequately covered, or call the team at Wealth Planning Partners to discuss your needs on 07 5593 0855.  They help clients Australia wide with their protection strategies.

 

[1] Lloyd’s Global Underinsurance Report 2016

[2] Rice Warner Underinsurance Research Report 2014

The Working Woman Juggle

As most women already know, there’s lots to juggle all at once. There’s our partner’s needs, the kids, maintaining the home and household, extended family, friends and fitting in the ‘me’ time.  And whilst some of this can be outsourced, in practice, it’s not always possible.

Which in turn, raises two major issues in life that need facing: Heath and Wealth.  If you’re healthy, efforts can be made to invest wisely.  If you’re unwell, here’s hoping you have adequate strategies in place.

Stress tends to pressure the adrenals into working overtime, producing cortisol and adrenalin.  That’s great if you’re trying to fight a huge spider, but on an ongoing basis, doesn’t do wonders for the internal organs.  Side effects can include high blood pressure which in turn raises other health risks.    The scary stats are that women have a 55% prevalence of cardiovascular disease (men 45%) and 5% burden of stroke (men 4%) and two thirds of all heart failure sufferers are female.  (Australia’s Health 2008)

And most women deal with stress by smoking and/or drinking.  Both of which also cause an increase in likelihood of cancer and organ damage.  Drug use is on the rise and it’s also difficult to maintain a great diet when eating on the run or at erratic hours,  and reaching for the comfort food or fast food.

Many women over 55 now have higher cholesterol than men and a greater incidence of diabetes mellitus.  Women also choose to put off child bearing to a later age, and unfortunately this in turn can lead to increased complications!

Who’d be a working woman??

Or the better question is… how can we reduce some of the stress??  Well, the top tips will come as no surprise, and take a little planning.

1. Ensure the diet is improved – even just increasing the fruit and veg and water intake can help.

2. Quit smoking.  You know why!

3. Decrease the amount of alcohol taken.  I’m up for a glass of bubbles as much as the next girl, but do ensure there’s a  couple of alcohol free days each week.

4. Time Management.  Take a look-see at each day and see if there isn’t just a better way of getting things done.  Can you delegate some tasks? Rearrange others? Have someone help out with the kids each week. Meal clubs and car pools can work wonders to free up time.

And for your own sake, please consider:  Life Insurance, Total & Permanent Disablement Cover, Trauma Protection and Disability Income Cover.

With such hugely active lifestyles now and associated risk factors, it’s vital that working girls have the products to provide an income stream or ability to pay down debts in the event of the unexpected.

Look after yourself!  You’re worth it!

WomanHappy