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You can afford Life Insurance!

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YouCanAffordSuperIn 2010, a study by Lifewise found that 95% of families didn’t have adequate levels of insurance. The typical Australian family will need to cope on half or less of their income as a result of underinsurance.

Understanding their finances are one of the main reasons Australians fail to protect themselves and their families. Here is how you can afford the premiums:

 

INSURANCE THROUGH SUPER

Did you know that you can pay your insurance premiums through your super? This may assist you with paying insurance premiums when you have a low disposable income.

OTHER WAYS TO PAY FOR COVER

You can make contributions to your super fund and gain tax benefits:

•             If you’re eligible to salary sacrifice to super, you can have premiums paid from pre-tax dollars. And because your super fund may be able to claim a tax deduction for the premiums, you may not need to pay tax on the contributions.

•             If you’re self-employed, making a personal contribution to super from after-tax income to cover premiums lets you claim a personal tax deduction.

YOU COULD ALSO:

•             Take advantage of tax offsets of up to $540 by making a super contribution to your low-income spouse.

•             Make personal contributions to super, and if eligible, qualify for a Government co-contribution of up to $500.

BE AWARE:

•             A benefit payment under superannuation is paid to the fund trustee.

The trustee will only pay benefits to you or your beneficiaries if you meet a superannuation condition of release.

•             Tax on death benefits is determined by who receives the benefits. You may need to ensure a binding death nomination is in place so that benefits are paid to those intended.

• Paying premiums from superannuation may erode your retirement funds so think about topping up your superannuation fund when you are able.

 

To take the first step to getting the right cover for you- call Fil today

 

Source IAIA

Why insure

Why you need life insurance

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Why insure

Do I really need insurance?

 

Most of us do not hesitate to insure our car, house and other possessions. However, we often neglect to insure the most valuable asset, ourselves and our partners.

 

 

Did you know?

  • 50,000 Australians have heart attacks every year
  • One third of women and a quarter of all men will suffer cancer at some stage in their lifetime – over 60% of whom will live for longer than five years after diagnosis
  • 43,000 people died from cancer in 2010
  • 70% of small business people are doing business without income protection (even though it’s tax deductible)
  • Over 1600 people die on Australian roads every year, the majority of whom are aged between 26 – 59 years
  • There is a one in three chance you will need to be off work for three months due to illness or injury before you turn 65

How would your life change if you had a sporting or work injury or if you were diagnosed with cancer?

Have you ever thought how you would pay your medical cost or keep up with the day to day bills?  Not having insurance can erode your savings or worst still result in a financial crisis.

Generally, there are two types of life insurance products; Lump Sum payments and monthly income streams.

Lump Sum:

  • Term Life cover: can provide a lump sum payment in the event of death or terminal illness.
  • Total and Permanent Disability cover: can provide a lump sum payment if sickness or injury leaves you totally and permanently disabled.
  • Trauma cover: can provide you with a lump sum payment in the event you suffer a serious medical condition (such as cancer, stroke or heart attack).

Monthly income stream:

  • Income Protection cover: can provide a monthly income stream to help you meet your financial commitments if you are unable to work due to sickness or injury.

Around 6.3 million Australians are protected by life insurance policies, with claims in excess of $1 billion being paid by life insurers annually.

Life insurance can be the safety-net to your financial well-being.  In times of need, life insurance can assist with your day to day financial commitments (mortgage repayments, living expenses), which will give you time for your emotional and physical recovery and most importantly, enable you to spend time with your loved ones.

Insurance: your soft landing

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Everyone has their own reasons for taking out life insurance. But one thing we all have in common is the need to hang onto it.

saftLanding

Do you remember what prompted you to first talk to a financial adviser about life insurance?

For many people, it’s when life stopped being about just you. Like when you got married or you gave birth to your first child.

Once you took on these responsibilities, you knew you needed to protect them. It was a smart decision then and it remains a smart decision every time you renew your policy.

Protection that stays with you for life

Life insurance comes in many shapes and sizes. It is designed so you can choose the types of cover that best suit your life stage, so you can adjust your level of cover as your circumstances change. One thing that doesn’t change is the underlying need for financial protection.

The main goal of life insurance is a simple one. If you get seriously sick or injured, it’s there to help you get the treatment you need and to help your family cope financially without your financial contribution.

Obviously protecting your income plays a key role in this. But even after you’ve finished working, life insurance can still play a vital role in ensuring your lifestyle isn’t compromised by sickness or injury.

Thinking even further ahead, life insurance can be used to create an asset that helps you distribute your estate as evenly and as generously as you would like.

Is your policy still right for you?

Over your lifetime, you might hold a life insurance policy for decades. But that doesn’t mean you should “set and forget” your life insurance strategy.

Every one to two years, you should discuss your life insurance needs with your financial adviser.

By being smart in the way you structure and manage your insurance, you can ensure your cover is always appropriate and that it’s as cost-effective as it could be.

mining-for-insurance

mining for insurance

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mining-for-insurance

mining for insurance

It has been difficult for some mining occupations to access life insurance in the past. But times are changing.

There are a number of reasons why working in the mining industry is very different to many other occupations.

In addition to working in a fast-paced, high-pressure environment, mining workers are often forced to live a long way from their loved ones. This is one of the reasons miners don’t always stay in the industry all their careers.

Compared to many other occupations, mining can also be dangerous. Whether working above or below ground, mining workers are often exposed to risks associated with heavy machinery, vehicles and working with explosives.

Despite improvements in workplace safety over the last decade, the mining industry still had 2,555 serious workers compensation claims in 2009/10.

Mining is also one of the riskiest industries in terms of fatalities, with an average of 3.5 deaths per 100,000 workers in 2009/10. That’s almost double the national average of 1.92.

Combine these threats with the risks everyone faces in their day-to-day lives – like cancer and heart disease – and it makes sense for miners to have a contingency plan for sickness or injury.

Life insurance considerations for miners

Traditionally, miners have found it difficult to access life insurance on standard terms. However, there are now insurers who offer affordable protection to many mining occupations.

The most common types of life insurance are:

Life cover pays a lump sum if you die or are diagnosed with a terminal illness. The lump sum can be used to meet final expenses, pay off the family mortgage so that your family isn’t left without a home, fund future child education fees and set aside money to meet your family’s ongoing living needs.

Income protection cover pays up to 80% of your income if you can’t work because of sickness or injury. This money is essential in helping to meet your ongoing living needs, including meeting your mortgage repayments, while you are unable to work.

TPD cover pays a lump sum if you are totally and permanently disabled. This may help you repay debts and medical bills, make modifications to your home and motor vehicle, as well as meet lifetime living costs.

Trauma cover pays a lump sum if you are seriously injured in an accident, or if you are diagnosed with one of a number of serious medical conditions, like cancer and heart attack. The proceeds can be used to meet medical treatment costs as well as provide financial support if your spouse wishes to take time off work to look after you.

In addition, miners should look for insurance policies that provide additional protection for accidents and that recognise the true extent of your earning potential – helping you protect the rewards of your hard work.

With so many different types of life insurance available, it’s important to discuss your own life insurance needs with your financial adviser

 

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The trouble with life insurance…

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The importance of life insurance

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trouble coming!

If illness, injury, or even death were to happen to an adult child who had just purchased a home, it would be quite likely that the child would have trouble meeting mortgage repayments and could possibly even lose the home.

With lump sum covers, the easiest way to do this is to set up a non-super life policy owned by the parents on the life of the child. This ownership structure would satisfy CGT exemptions under section 118-300 ITAA97 for term life and section 118-37 ITAA97 for TPD and trauma.

The level of cover should at least be the amount of the loan or gift, so that the parents would not have a shortfall if an insurable event occurs. Income protection for the child should also be considered. This must be owned by the child to ensure that a tax deduction can be claimed. Once the loan is repaid, the parents have the option of transferring the insurance cover to their adult children, so they could assume premium payments.

Contact your financial adviser today to find out the best option for you.