Personal Financial Solutions believe that every person requires some form of life insurance. Life insurance can provide a lump sum payment in the event of death. This money could be used to:
- Clear your personal debts to save your loved ones the burden (Home Loans, Car Loans, Credit Card, Tax Debt).
- Enable your family to meet their ongoing living expenses and maintain their current lifestyle.
- Cover other expenses such as childcare, housekeeping, education expenses and treat your beneficiaries equitably.
- Give you the send off that you want/require.
Do you hold life insurance inside superannuation or outside superannuation? How much life insurance is enough? Whilst the answer is different for individual we here at Personal Financial Solutions are of the belief that as a minimum your insurance should enable your beneficiaries to clear your debts and to cover burial costs.
Then there is the premium structure behind your insurances. Do you have or require Level, Stepped or Decreasing? On top of all of this then there is the Modern Family. How will the money be split? Will your children from a previous relationship get the same as the children from your current relationship? Answer maybe yes today but what about in 20 years? Binding Death Nominations can deal with this issue outside of the Estate Planning. What about if my relationship does not fit into the “hetrosexual relationship”, how does this affect me and what is the SIS legislation in regards to “homosexual relationship, bisexual relationship, interdependency relationships”.
TPD – Total Permanent Disability
TPD insurance can provide a lump sum payment if you suffer a total and permanent disability and are unable to work again. This money could be used to:
- Clear your debts
- Cover medical and rehabilitation expenses
- Make alterations to your home for wheel chair access
- Pay for a live in nanny
You don’t have to be wheelchair bound to be TPD. TPD can include loss of limb, loss of sight , loss of use of a limb. Could you still work if you were in a wheelchair, blind, lost an arm, lost a leg, triple heart by-pass? Can I hold TPD insurance inside super? If I get TPD will i get the payment or will my superannuation get the payment? What is meant by a condition of release?
Also known as Critical illness. Critical illness insurance lump sum payment can help you and your family with costs such as
- Your living expenses
- School fees
- Help around the home (mowing, gardening, handyman repairs, cleaning)
- Reducing mortgage payments/stress
- Taking a holiday to help recovery
- Best doctors
- Medical bills and associated cost
When suffering a Critical Illness such as Bowel Cancer, Triple heart by-pass surgery the associated costs that become involved with the illness can range also being off of work for an extended period of time. Yes well done you have income protection but that only pays 75% of your income meaning you still need to come up with the extra 25% of your income + the cost for the extra help around the home. Mowing the lawns, cleaning the house, medications that are not on the PDS, walking the dog, driving to your appointments.
Income Protection insurance can provide a monthly payment of up to 75% of your income if you are temporarily unable to work due to illness or injury. This money can be used to meet your ongoing living expenses and financial commitments while you’re recover.
We insure our car, we insure our home but what about our income that pays for the car, the home, the food, the education? With insuring up to 75% of your gross income then times will be tight but not as tight as not working and only being able to claim new start allowance or disability pension.
Median income for May 2014 by the ABS http://www.abs.gov.au/ausstats/abs@.nsf/mf/6302.0 has a full-time weekly time earning of $1453.90 , Income Protection could give you $1090.43 compared to the newstart allowance of $515.60 fortnight or $257.80 per week http://www.humanservices.gov.au/customer/enablers/centrelink/newstart-allowance/payment-rates-for-newstart-allowance
Income Protection can be held inside or outside superannuation. Inside superannuation has limitations such as ANY occupation definition where outside superannuation can be OWN occupation and can reduce your tax payable. https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Other-deductions/Income-protection-insurance/
Ok you have Income Protection , WELL DONE. Ask yourself these questions. How long do I need to wait until I get the benefit? How long will I get paid the benefit? There are once again numerous options here and everyone is an individual, 14 days , 30 days, 60 days, 90 days, 120 day waiting period then a benefit period for 2 years, 5 years, til age 65. The premium structures are all different and different for your type of employment. Can I even get the insurance? I am a pilot who will insure me? I am a Roof plumber who will insure me? I am a truck driver who will insure me? Where is the best cover for me?