Personal Insurance

Insurance is simply a choice. A choice whether you want your family's lifestyle to be protected in the event of your Death, Total and Permanent Disablement, Trauma, illness or injury and, at what cost are you prepared to have this protection.

If you have not already got sufficient retirement income you need personal insurance. Wealth protection is an integral part of financial planning.

Insurance Types

To fully protect your family's lifestyle, insurances required include:

• Term Life insurance provides a lump sum benefit payable upon your death.
• Total and Permanent Disablement (TPD) insurance provides a lump sum benefit payable if you can no longer work or perform home duties.
• Trauma insurance provides a lump sum in the event of cancer, heart attack, stroke and more.
• Income Protection insurance provides a monthly income should you not be able to work.
• Business Expenses insurance covers business expenses in the event of certain circumstances.
• Children insurance provides financial assistance for parents when children are sick, disabled or suffer a traumatic event

Tax, Insurance & Estate Planning

Comprehensive insurance cover considers tax and estate planning.

Please see our estate planning section for details on this topic.

The two main areas of tax include:

• maximising tax deductions of insurance premiums; and
• minimising tax on insurance payouts and future earnings of that capital.

Level Versus Stepped

Policies can either be:

• Renewable each year (stepped premiums), meaning that the premium is calculated each year and will normally increase as you get older; or
• Level premiums, meaning that the premium stays the same each year until the term of the insurance policy expires.

Premiums for both stepped and level cover will increase with inflation and for policy enhancements.

Which cover is appropriate?

Depending on your age and health, stepped premiums will be cheaper than level premiums for a period of between 6-8 years. Stepped premiums generally start to become expensive in your early 40’s. At this time it is common for people to stop paying premiums when they become too expensive. However, this often coincides when they need the insurance the most.

For this reason we can recommend clients have a combination of stepped and level premiums. The level premium cover portion should be the amount of insurance cover you think you will need at the point in time when stepped premiums become more expensive than level premiums.

Common Insurance Mistakes

• 'Own occupation' TPD policies in superannuation.
• Life insurance held outside superannuation when the life insured has dependants.
• 'Any occupation' TPD policies held outside superannuation.
• People with no dependants with Life Insurance (although this is a personal choice). However many superannuation funds do not offer stand alone TPD.
• Not considering linked policies.
• Over-insurance.
• Under-insurance.
• A dependence on corporate superannuation fund insurance when benefits are lost in the event you leave your employer.