A well structured financial future is to plan for the expected and also the unexpected!
Ongoing financial security and risk protection is an important consideration and something that everyone should review and as circumstances change so should your cover to suit your lifestyle.
It’s important to understand that you are your own best asset and if a health event were to occur where would this leave you or your family?
Firstly, please ask yourself these few simple questions and if any of them have unknown answers then perhaps a review would be a worthwhile exercise, even if it’s just for peace of mind.
- What type of personal risk insurances do I have and what company provides the cover?
- What levels of cover do I have in place for each and why?
- How much do I pay for my cover?
- How is my cover paid for? (personally or through my Superannuation)
- Have I structured my premiums correctly to maximise my cashflow and tax deductions?
Some simple questions that may not take long to answer or questions that potentially, may uncover a problem that should be addressed.
A serious health event can put your family’s financial future, assets and possessions at risk.
How can risk protection help me?
Risk protection can help provide for you and your nearest and dearest even when you experience a set back due to illness, injury or a long-term change to your health. If and when this happens, it’s surprising just how much there is to pay for on a day-to-day basis:
- General living costs
- Children’s education and social activities
- Medical expenses
- Modifications to your home
- Having to use savings to replace income
Risk protection allows you to focus on recovery, rather than financial burdens.
Won’t Centrelink and Worker’s Compensation cover these expenses?
It is a misconception that Centrelink and Worker’s Compensation will cover your needs if your health is compromised. These benefits may not necessarily apply to you, and if they do, they may not be enough to finance the lifestyle you’ve become accustomed to.
Centrelink pays a maximum Disability Support Pension of:
- $860.20 per fortnight for singles
- $648.40 per fortnight for a member of a couple
This amount would barely pay your home loan let alone your bills, lifestyle and children’s education.
You will only be covered by Worker’s Compensation if your accident or illness is a direct result of your employment. However, The Australian Bureau of Statistics states that 60% of all injuries occur outside the workplace.
So what are the options for Risk Protection?
1) Life Insurance – provides financial security for your family in the event of your death, with a lump sum payment or instalments. This could help loved ones pay off the mortgage, other debts, provide for your children’s education and cover living expenses. As markets and assets are always vulnerable to volatility, your assets may not always maintain their current value.
2) Trauma Cover – provides a lump sum payment or instalments if you are diagnosed with a specific condition such as cancer, heart attack, stroke, etc.
3) Total & Permanent Disablement (TPD) Cover – provides a tax-free lump sum or instalments, if you are unable to work due to illness or injury.
4) Income Protection Cover – protects your ability to earn an income and can provide up to 80% of your regular annual pre-tax income as a monthly payment. In most cases, insurance premiums can be claimed as a tax deduction.
5) Living Expense Cover – is designed for people who just want a basic level of cover e.g. retirees, casual employees, home-makers, etc. This enables you to pay daily living costs or the costs of either in-home carers or a long-term care facility.
If you want to review any of the above, give Leed Financial Services¹ a call and talk to our specialist to find the best cover, the most appropriate, affordable and best structured cover for you.
¹Centro Financial Services Pty Ltd T/A Leed Financial Services ABN 88 101 406 884 is a corporate authorised representative (ASIC No 278162) of Millenium3 Financial Services Pty Ltd 61 094 529 987 Asutralian Financial Services Licensee – Licence number 244252 Unit 7/50 Borthwick Ave Queensland 4172.