What you need to know
While many people insure their home, car and possessions, it is even more important to make sure your family and lifestyle are protected from financial misfortune. Without a regular income, it can be a challenge just paying for everyday household expenses like groceries and power bills, while ongoing mortgage repayments or school fees can quickly eat away any savings. Worse still, if you're self-employed and can't work because you're ill or disabled, you could be faced with the added pressure of the business bills rolling in.
The good news is that we can use risk insurance to structure a total financial protection package for you to protect against loss of income, disablement, serious illness and death.
Insurance is never a luxury. You may go for years without making a claim, then one day the unexpected happens. No one can eliminate the devastating emotional impact of serious illness, disablement or death, but if you have to deal with money problems as well, the situation can be much worse. Having money available when you need it most is what makes insurance so valuable.
While car and home insurance are relatively straightforward, personal risk cover can be complex, with many different options and levels of cover to choose from. We can help you decide which cover is right for you and what issues you need to consider. For example, which family members would you insure? When does it make sense to insure a non-working spouse? How should the benefits of any payment be distributed? What benefits are available within your superannuation scheme? What are the tax implications of taking out insurance?
Your biggest asset?
Have you ever contemplated what your biggest asset is? Is it your home? Most people would think it is, but most people would be wrong. Is it my superannuation? Well if you are a retired person, perhaps it is. How about my car? It’s very unlikely. Give up? For the overwhelming majority of people of working age, it’s your income!
Consider this, according to the Australian Bureau of Statistics, in 2019 the median annual full time wage was $84,957, and was increasing at that time by 3% per year. So for a 40 year old earning that income who works until 65, that is worth nearly $3,500,000!
Now almost everybody in Australia insures their home, even most would not think twice about insuring their $10,000 car, but less than a third of Australian’s (according to the 2017 Rice Warner Underinsurance Australia Report) have adequate income protection cover,with the Rice Warner report suggesting the median level of income protection cover in Australia only meets 21% of basic needs.
At FinNest Financial, we can help you get the right cover for peace of mind should you income cease through illness or injury, and help you protect your biggest asset.
Do you have enough cover?
It’s all very well to have ‘some’ insurance, but many people are under-insured or don’t really know what type or how much insurance they have. Alarmingly, according to the 2017 Rice Warner Underinsurance Australia Report, the median level of life insurance cover only meets 47% of basic needs and the median level of total and permanent disability cover meets 14% of basic needs. Invariably those in this position find themselves in dire financial circumstances when they make a claim. It’s important to accurately assess how much insurance you need. This is an area where FinNest Financial can help you. We’ll help identify your greatest areas of risk and work out how much cover is appropriate for your needs.
Sound advice is the key to success
As you will see from the case studies below, an experienced financial adviser can help you identify the areas of greatest risk to your situation. FinNest Financial offers knowledge, expertise and experience in this area. We’ll take the time to understand your individual circumstances and then recommend appropriate insurance strategies to help protect your family and assets.
Click here to see some success stories from our happy clients who we’ve helped plan, grow and protect their wealth.
To find out how we can help you protect your financial future, call 07 3831 7629 or email us.
Case Studies
How the right advice can help
You can use a number of strategies to achieve your Insurance goals. The following case studies provide examples of this.
Max, 35, is an accountant earning $60,000 a year. He’s married to Sarah, 34, and they have two children aged four and two. Sarah currently stays at home caring for the children. Max and Sarah have a $140,000 mortgage, $4,000 owing on credit cards, and a car loan of $6,000. Max’s superannuation includes $50,000 of life insurance cover. Max is worried that if something happened to him, his family would be in financial difficulty.
After speaking to his financial adviser, Max decides to take out a $1 million life insurance policy and $200,000 trauma and disability insurance. When combined with the existing life insurance he has under super, if Max dies unexpectedly Sarah and the children will have $900,000 to live on after all debts are paid. Also, if Max was to suffer from one of the medical conditions specified in his trauma insurance policy or suffer a total and permanent disability, the lump sum he receives would help meet his medical treatment costs, hopefully without the need to dip into the family’s savings or go further into debt.
Max’s adviser also suggests he consider insurance for Sarah. Although she is not working, she makes a valuable contribution through running the household and looking after the children. His adviser points out that if Sarah died unexpectedly, Max would need extra money to arrange for the care of his home and children. As a result, Max decides to take out $500,000 life cover and $400,000 trauma cover for Sarah as well.
Disclaimer
This case study and any graphs or examples included in this case study are for illustrative purposes only and are based on specific assumptions and calculations. Individual circumstances may vary and this will alter the outcome. The case study does not represent any forecast or guarantee on return.
The information provided on this website is intended to provide general information only and the information has been prepared without taking into account any particular person’s objectives, financial situation or needs. Before acting on such information, you should consider the appropriateness of the information having regard to your personal objectives, financial situation or needs. In particular, you should obtain professional advice before acting on the information contained on this website and review the relevant Product Disclosure Statement (PDS).
Relevant PDSs can be obtained by contacting us. No representation or warranty is made as to the accuracy, completeness or reliability of any estimates, opinions, conclusions or other information contained on this website. This website may contain certain forward-looking statements. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control. You should not place reliance on forward-looking statements. To the maximum extent permitted by law, we and Matrix Planning Solutions Limited disclaims all liability and responsibility for any direct or indirect loss or damage which may be suffered as a result of relying on anything on this website including any forward looking statements. Past performance is not an indication of future performance.
Finnest Financial Pty Ltd ACN 163 390 547 is a Corporate Authorised Representative No. 440812 of Matrix Planning Solutions Limited ABN 45 087 470 200. AFS & ACL 238256.
Arthur is 55 and earns $120,000 a year as a sales representative. He is married to Fiona and they have three children aged 22, 19 and 17. The children have all finished school and the youngest is about to start university. Arthur is planning to retire at 65 and has $200,000 life insurance through his super.
Arthur has built a comfortable life and has a number of assets, including a lovely home and a fishing boat. He has no debts and retirement is still almost 10 years away, however it is important to Arthur that he remain able to maintain his current lifestyle should he become unable to work due to sickness or disability. He certainly would not want to sell any of his hard-earned assets or eat into his retirement savings to support his day-to-day living costs should anything unexpected happen.
After speaking to his financial adviser, Arthur takes out an extra $200,000 life cover with $200,000 total and permanent disability cover to pay for medical treatment and any alterations necessary to his house if he became totally and permanently disabled. He also decides to take out income protection insurance, selecting a benefit of $7,500 a month (75% of his current income) up to age 65. With these additions to his insurance cover, Arthur feels comfortable that he could retain his current lifestyle without eating into his assets should he be unable to work due to sickness or disability.
Disclaimer
This case study and any graphs or examples included in this case study are for illustrative purposes only and are based on specific assumptions and calculations. Individual circumstances may vary and this will alter the outcome. The case study does not represent any forecast or guarantee on return.
The information provided on this website is intended to provide general information only and the information has been prepared without taking into account any particular person’s objectives, financial situation or needs. Before acting on such information, you should consider the appropriateness of the information having regard to your personal objectives, financial situation or needs. In particular, you should obtain professional advice before acting on the information contained on this website and review the relevant Product Disclosure Statement (PDS).
Relevant PDSs can be obtained by contacting us. No representation or warranty is made as to the accuracy, completeness or reliability of any estimates, opinions, conclusions or other information contained on this website. This website may contain certain forward-looking statements. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control. You should not place reliance on forward-looking statements. To the maximum extent permitted by law, we and Matrix Planning Solutions Limited disclaims all liability and responsibility for any direct or indirect loss or damage which may be suffered as a result of relying on anything on this website including any forward looking statements. Past performance is not an indication of future performance.
Finnest Financial Pty Ltd ACN 163 390 547 is a Corporate Authorised Representative No. 440812 of Matrix Planning Solutions Limited ABN 45 087 470 200. AFS & ACL 238256.