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

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.

Get in touch with Dev Sarker today on 1300 71 71 36. We look forward to partnering with you to help protect what matters most in this incredible life, and help take the financial pressure off you and your loved ones.

Don’t let an illness stop you from looking after your finances.

A Financial Adviser could work with you to develop a financial plan that’s specifically tailored to your needs, so get in touch with Dev Sarker today on 1300 71 71 36.

According to research by TAL insurance provider the cost of personal insurance soars after the age of 35. This is also the time in our lives that you may be going through significant change such as marriage, children, a bigger mortgage and more responsibilities.

In the previous 5 years to 2017, TAL paid out insurance claims to the sum of $66m to people
aged up to 35, but this figure soared for those aged 35 – 46 to a total payout sum of $152m.

From our experience working with clients and insurance providers, it’s wise to get a personal insurance cover in place before you turn 35. If you are approaching your 35th birthday now is the ideal time to think about this, but it is important to stress that an appropriate insurance plan is wise
at any age.

It’s time to get some professional advice – from an adviser with the technical expertise and experience required to make sure you’re properly covered.

But before you make such an arrangement, it is wise to get professional advice on how it works. Your financial adviser may talk you through the rules of spouse contributions and the requirements
to become eligible for a tax offset.

Speak to Dev Sarker today on 1300 71 71 36!

When things go wrong, it’s nice to know you’re covered. But getting suitable insurance cover can be a matter of getting professional advice.

Protecting what you have worked hard for is important, so it’s essential to get appropriate insurance cover. To do that, you need help.

It’s a good idea to speak to your financial adviser about your personal cover regularly, especially if there have been changes in your life, such as a new home loan, the arrival of children or changes to your marital status.

Life insurance

Several types of products fall under the broad category of life insurance, including life cover, trauma cover, income protection, and total and permanent disability (TPD) insurance.

Life cover pays the beneficiaries on your policy a predetermined amount when you die.

TPD insurance pays a lump sum if you are totally and permanently disabled to help with rehabilitation and living costs. TPD is often offered within superannuation and bundled with life cover.

Trauma cover insures you for specific catastrophic illnesses or injuries, such as heart disease, loss of limbs or cancer.

Income protection provides money to keep you going if you’re unable to work because of sickness or injury.

Affordability

There are a number of ways you may be able to cut the cost of insurance without reducing your cover.

For example, some insurers offer ‘bundle’ discounts, which means they reduce premiums if you have several policies with the company.

Certain premiums, such as those for income protection insurance, are also tax deductible if you pay them yourself. This may make these policies more affordable.

Stepped versus level premiums

Another option is to consider ‘stepped’ over ‘level’ premiums.

Stepped premiums may be cheaper when the policy is issued but increase as you age. It pays to do the sums and consider what the total cost of the premiums will be over five years or so.

This may be a good option for new business owners or others who don’t have a lot of disposable income but expect to earn more over time.

Level premiums are not affected by your age, but are generally more expensive than stepped premiums in the beginning. If you want to control your costs over time and intend to hold the insurance for a long period, level premiums may be less expensive in the long term. Nevertheless, the premiums may be affected by inflation or be adjusted by the insurer.

You may also be able to have a combination of stepped and level premiums based on your circumstances and policy structure. For example, you may want level premiums for income protection and trauma cover if you intend to have them for the long term, and stepped premiums for life cover and TPD. The important thing is to review your premium structures regularly with your adviser.

Superannuation options

Funding life insurance through a superannuation fund may be tax effective. In fact, it is common to use a super-linked policy when bundling life cover with TPD.

The result may be significantly lower premiums and it may also be possible to increase the sums insured for no additional net cost.

Funding income protection through superannuation, however, is subject to terms and conditions that your financial adviser can explain. In many cases, it may be better to fund income protection outside superannuation.

Seek advice

Before committing to any insurance, it’s crucial to speak with an expert adviser who will explain the different types of insurance and their applications and calculate what cover you need.

They can also be there to lend a helping hand at claim time, working hard to smooth the way and reduce the stress on your or your family.

Speak to Dev Sarker today on 1300 71 71 36!