Types of Personal Cover
There are a number of different products that provide cover for different purposes, sometimes all together and sometimes separate.
Life Protect Financial Services can give professional advice to the levels and structures that best suit your personal circumstances.
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Take Control
If you already have cover, when was the last time you had a thorough review?
Circumstances change and so should your personal insurances.
To ensure your adequately covered and not paying too much for that cover:
Call or email for an obligation free review today!
Life Insurance - A lifetime of support
No-one likes to think about their mortality. It’s a subject we all want to put off for another day. But it is important to consider the possible impact on your family so you can put a strategy in place to support them if you were no longer here to do so.
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Every day, more than 17 Australian families* with children experience the loss of a parent.
How would your family cope financially without you?
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But there are steps you can take to reduce the stress. Term life insurance provides a lump sum to your family in the event of your death or diagnosis of a terminal illness. Just 4% of Australian families with dependent children have the right amount of life insurance. The remaining 96% are underinsured to the tune of $1.37 trillion – a big financial burden that loved ones are left to bear.
This payment could be used to meet a range of needs such as:
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repaying debt
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medical and funeral expenses
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children's education costs
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replacement income
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business succession
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estate equalisation
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gifts to loved ones.
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How much is enough?
The average life insurance policy in superannuation provides only 20% of what a family needs . This often isn’t even enough to pay off the mortgage.
It can be difficult to work out how much life insurance to take out - that’s where an insurance professional can help. Many families have struggled financially after the loss of a loved one, even if they did have insurance, simply because it wasn’t enough to meet current and future expenses.
Every family is unique and it’s important to work out just how much insurance you need for your individual situation. We can help you do the sums.
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Who gets the payment?
There are many different ways to structure ownership of a life insurance policy, such as:
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through superannuation
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owned by a beneficiary
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nominated beneficiary
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Each option has pros and cons. We can explain these to you and suggest a structure that suits your particular needs.
Life insurance doesn’t have to be complicated but there are many factors to consider. We can help you to get it right and ensure that, even when you aren’t here, your family receives a lifetime of support.
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* The Lifewise/NATSEM Underinsurance Report
† Investigating the issue of underinsurance in Australia”. Research for IFSA by TNS, July 2005
‡ Rice Warner Actuaries, Lifewise, as cited in “Risking Everything: Facts and Figures June 2011, AFA White Paper
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Total and Permanent Disablement (TPD)
Imagine if you were unable to ever work again. This is the situation facing around 516,700 Australians aged between 15 and 65 who have a profound or severe disability as a result of disease, illness or injury*.
What if you were totally and permanently disabled?
Not only would you be unable to earn an income, but it’s likely you would need years of ongoing medical treatment and rehabilitation.
Total and permanent disablement (TPD) cover will provide a lump sum which may assist you:
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pay your mortgage
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meet medical expenses
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modify your home
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provide a replacement income
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pay for a professional carer
What does totally and permanently disabled mean?
There are four main types of total and permanent disability insurance definitions used in Australia:
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Own occupation – you have a total and permanent disability that prevents you from working in your own occupation which you disclosed when you applied for the insurance.
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Any occupation – you have a total and permanent disability that prevents you from working in your usual profession or business, or any other occupation for which you are reasonably suited by your education, training or experience.
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Homemaker – you have a total and permanent disability that prevents you from engaging in any normal domestic duties
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Modified TPD – you have suffered from a loss of limbs, loss of independent existence or cognitive loss, and will generally need assistance with normal life functions.
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We can explain the practical differences between these definitions and help you choose a policy that suits your needs.
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By having TPD cover, even if the unexpected occurs, you and your family have the financial resources to help you maintain your quality of life.
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***Australian Bureau of Statistics (2010) Disability, Ageing and Carers, Australia: Summary of Findings, Catalogue 4430.0
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Income Protection Insurance
Works for you when you can’t work
Your ability to earn an income is your greatest asset. One in three Australians will be off work for more than three months during their working life due to illness or injury*.
Could you afford to be off work for more than a few days?
It’s a common myth that extended absences are covered by workers compensation:
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Workers’ compensation only pays when accidents or injuries occur during working hours or for an illness directly related to your employment.
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The benefit is also capped under the different state regulations.
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Half of all serious accidents occur away from work.
It’s not just about the bills.
Your income doesn’t just allow you to put food on the table or meet mortgage repayments. It funds your lifestyle, your dreams and aspirations.
By protecting your income, you’re protecting your future.
If you can’t work because of illness or injury, income protection insurance pays you a regular amount based on your normal income. And you’re covered 24 hours a day, anywhere in the world.
Protection you can customise.
When you take out your policy, you can choose each of the following features:
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Benefit period
This is the maximum length of time you can receive payments if you are on a claim. This usually ranges anywhere from two years or until you turn 65 or 70.
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Waiting period
This is the time you need to be off work due to an illness or injury to receive payments. This could be as short as two weeks or one month, or as long as one or two years. This can help to act as a fill in for any group cover that is restricted to a 2 year benefit period.
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Additional options
These can help make life easier while you’re on a claim. They may include continuing superannuation contributions, in-home assistance or specific injury payments.
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Of course, each of the choices you make will affect the cost of the policy.
We can discuss your options with you, explain how this affects the premium, and
help you make the right choice.
* Institute of Actuaries of Australia (2000) Interim Report of Disability Committee
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Trauma Insurance (Critical illness)
Cancer, stroke and heart attack.
When they hit, these conditions are physically, emotionally and financially draining.
The statistics are startling. Every ten minutes in Australia, someone has a stroke. 50,000 Australians suffer from heart attacks every year. One in three women and one in four men will be diagnosed with cancer*.
These aren’t just bare statistics: we all know someone personally who has been affected.
Most people survive these conditions, but it takes time and money to recover. Yet only one in four Australians have the right strategies in place to protect themselves financially.
What if it happened to you?
Trauma insurance – sometimes called recovery or critical illness cover – is designed to give you money when you need it most.
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It pays you a lump sum on diagnosis of certain medical conditions such as:
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Alzheimer's disease
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Blindness
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Severe burns
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Coma
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Coronary bypass surgery
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Deafness
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Chronic kidney failure
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Multiple sclerosis
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Chronic liver disease
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Parkinson's disease
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Trauma insurance enables you to focus on what’s important.
It provides a financial boost to help you and your family concentrate on your recovery, without worrying about how to meet the bills.
Some policies even provide cover specifically for children, so you can remain with them when they need you most.
With two out of three men and one out of three women likely to suffer a traumatic event during their working life, trauma insurance is a necessity not a luxury.
13 new cases of cancer will be diagnosed every hour this year*
FACT: An estimated 13 new cases of cancer will be diagnosed every hour in Australia in 2010.*
FACT: 1 in 2 men and 1 in 3 women will be diagnosed with cancer before the age of 85.*
FACT: More than 60% of cancer patients will survive more than 5 years after diagnosis.*
FACT: The most common cancers in Australia are prostate, bowel, breast, melanoma and lung cancer.*
* www.cancer.org.au About Cancer – Facts and Figures
It’s insurance you can’t afford to live without.
* Australian Bureau of Statistics (2009) National Health Survey, Catalogue 4362.0
Everyone has goals and dreams.
How do you know if you’re business will stay on track to achieve them?
Every business needs to consider what might happen to the business if one of the owners (or guarantors) should die, become disabled or suffer a traumatic illness.
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Often there are key individuals within a business who either manage the business, produce significant portions of the business income, or provide or secure the money to fund the business.
A succession plan may avoid the financial hardships for the surviving partners and the deceased’s family.
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Debt reduction or guarantor protection
What reliance is the bank (or other creditors) placing on any particular partner to meet the financial obligations of the business towards that creditor?
What plans are in place to repay the loans of the business, particularly if one partner dies?
Succession planning
If you suffer a heart attack, a stroke, an accident or die have you planned to:
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Retain your business for your family; or
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Sell and relinquish your interest to your partners, key employees or a third party?
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If you ignore the opportunity to plan your own succession, what will be the result of your failure to plan?
You are leaving your business susceptible to self-destruct - This is known as “business euthanasia”.
You had the ability, vision, and guts to build your business from nothing.
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Do you have the courage to face the challenges of the future? If not, your lawyer and accountant will do it for you (on the way back from your funeral, four cars back from the flowers).
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Would you strive to make more sales and sign more contracts if you knew that within 24 hours of your partner’s death your business will share your partner’s coffin?
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A Business Succession Plan is a financial and tax plan that can give your business every chance of survival when you are gone or suffer a long term illness or accident.
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Ensure your family and yourself receive the true value of your interest in the business
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Allow for an orderly transition of ownership to the remaining partners, family members, or key employees - rather than suffer a fire sale
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Provide a ready market for your business interests
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Retain key employees
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Buy Sell Agreement
Important questions every business owner should ask:
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Would the remaining partners be prepared to work with the family members of the deceased partner?
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Can the deceased partners family members continue to add value to the management of the business?
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Will there be a conflict between the income needs of the deceased partners family members and the re-investment for growth needs of the surviving partners?
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What amount and over what time period will the remaining partners buy out the family of the deceased?
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Where will the funds come from and will this impact adversely on the cash flow of the business?
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What of the cash flow / income for the deceased’s family?
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Key person protection
Would the business remain viable on the death of a particular partner?
As a sole business owner would you like to have a buyer who will pay your family for all your years of hard work?
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Business expenses cover
Protects your business if you become totally disabled and are unable to work due to sickness or injury by covering the fixed monthly expenses of the business.
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Peace of mind for self employed people
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When a business owner can’t work, the bills still need to be paid.
Most small businesses in Australia rely on the owner to generate revenue, so if they’re injured or ill, the income often dries up.
How to keep your business running when you can’t be there
Business overheads insurance is specifically designed to help self employed people when they are struck by serious injury or illness.
It will pay business costs such as:
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wages and salaries for staff
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rent for business premises
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business-related loan repayments
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property rates and taxes
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electricity, telephone and other utility expenses
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business insurance premiums
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accountancy and audit fees
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business vehicle registration and insurance
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postage, printing and stationery
The whole package
When combined with income protection insurance, business overheads insurance can provide comprehensive peace of mind for self-employed business owners.
Also, premiums are usually tax-deductible.