I have a duty of care to talk to all my clients about protection when they are borrowing money to purchase a house because I personally want to ensure they can continue to live the lifestyle they are used to regardless of what may happen in the future.
Typically, when I have this discussion with my clients they may h
ave something in place within their Superannuation (they are not sure what it covers and how much it covers) or getting quotes is on their ‘To Do’ list and has been along with combining Superannuation accounts and reviewing their Car Insurance.
Unfortunately, as important as personal insurance is it can only help you if you have something in place. So I asked Michelle from Protect Life Insurance to share her thoughts around some common questions my clients ask and here’s what she said….
I have cover in my Superannuation that will be enough cover wont it?
Insurance cover within Superannuation as a default does take into account your financial situation as a whole. It also rarely assesses your situation as an individual. No one really calls and asks the important questions like “Do you currently have debt?” or “Have you recently had a life changing experience?” Usually your financial situation or current stage in life, isn’t captured or considered until you need to make a claim.
Other things to consider about insurance in your Superannuation Fund:
- Do you have a Beneficiary in place? And is it up to date?
- What kind of insurances do you have and is it enough/too much?
- Can it continue if you stop making contributions to it or if you change jobs?
- Does the level of cover decrease as you get older?
- If on claims, is the amount of time that you get paid for long enough and how long do you have to wait without money to get paid your benefit?
- Will you receive a lump sum amount in one payment for a serious medical trauma condition?
I’m only young so I don’t need it do I?
How young is young these days? Everyone can get sick or injured at any stage of life. Sickness – We often think that Heart Attacks, strokes and cancer can happen at any time, but people are experiencing these life changing events at young ages. Think of someone that plays sport and is young and in the prime of their life….Accidents can happen anywhere, anytime and at any stage of life. As well as this, the chances of accidents are more prevalent for the young and protection is needed in the event that you can’t work and care for your loved ones and live financially comfortable day to day.
Many people will think that their place of employment or sporting club will cover them, but think about this….Do they know your current financial situation and do you think they would be willing to pay for you if you were never able to work or play sport ever again????
Work Cover will usually only pay the minimum weekly wage. Is that enough for you and your family to live off long term?
When should I review what I have in place?
Usually when you work with a financial professional they will review your financial situation and coverage once a year, but there are always life events that happen out of this yearly review. It is a good idea to review what you have in place in the event of a life changing circumstance such as the following:
Marriage or Separation, Birth or Death, Buying a property or Selling a property, Inheritance, Changing Employment, or a change in health circumstances.
It is best to always feel comfortable with the levels of cover that are in place for your loved one and hopefully with the right person looking after your back up plan, you should feel that you can approach them any time, even if it just for clarification or a general chat.
How do I know what the best type of cover is for me?
This is where working with a financial planner who specialises in risk management is important, these professionals take a vested interest in finding the right product with the right features and benefits for you and your situations. They can tailor a policy to suit you can your loved ones. It is a good idea to find someone that understands what your goals and objectives are when seeking to be covered the right way for you.
Is there any way to lower the premium to save money?
There are many ways to get to a comfortable spot so that you have adequate cover and is in your budget. You may want to reduce the level of cover into your budget. Something is always better than nothing when it comes to being protected.
Did you know that you can pay for most of you back up plan via your Superannuation fund? That’s right, Life, Total Permanent Disability, Income Protect can all be paid via your Superannuation fund. Which does affect your weekly cash flow amounts, giving you more ability to have the protection you need and feel secure.
If you want any more information you can contact Michelle from Protect Life insurance on 0424 930 483 or visit their Website www.protectlifeinsurance.com.au