1. Changing jobs, moving home, re-financing or birth of a child are some common Trigger events that should prompt you to review your insurance cover.
    

2. Make sure that the ownership of the policies will give you the best solution for Premium tax deductibility and help minimise tax on benefits. The major Beneficiaries of these strategies are self employed, company directors, DIY super Fund members and breadwinners who make contributions on behalf of low income spouse.
    

3. Income protection policies that have an agreed value, guarantee the monthly benefit you apply for as long as you have disclosed your correct earnings and it doesn’t exceed 75% of your taxable income. (some fringe benefits can also be included).
    

4. There are also income protection policies, which are cheaper to purchase. These policies offer cover of up to 75% of your income at the time of a claim, although many policies now have a look back period of up to 3 years. If you are self employed or a company director and your income is reduced in the year you have a claim and is outside the look back period, your insurance payout could be less than you expect.
    

5. When you are applying for insurance cover, make sure you complete the health declaration and income details In the proposal. This will help reduce the chances of non-disclosure because of a misunderstanding when completing the proposal between you and the adviser.
    

6. Don’t confuse taxable earnings and gross turnover if your self employed. For income protection you can only Insure your gross personal exertion income after the deduction of business expenses. If you have fixed expenses such as leases, rates, loan interest etc you should consider a business expense policy.
    

7. You need to be aware there are two types of insurance premium structures. The most common is Stepped premiums which increases in cost each year with age. Stepped premiums might start off as relatively inexpensive but later in life at the time you most need insurance you might not be able to afford the premiums. At the right age you should give serious consideration to level premiums as they can be more cost effective over time and allow you to budget for a consistent premium.
    

8. Having your insurance policies with one company can save on policy fees and could entitle you to a multi policy discount that can be as high as 15%.
    

9. If you are considering insurance as part of a business succession plan, you will need the services of an accountant to determine a business valuation, a lawyer to complete the necessary agreements and a competent insurance adviser to provide the funding mechanism.

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Features, benefits and price of insurance have gone through considerable change in recent years. There are also tax and legislative changes that make a regular insurance review even more important.

 

Contact us to see how you could benefit from an obligation free review.