Did you know you are worth over $2,000,000?
By far the most common question we receive from clients is “How do I compare to others like me?”
But would you believe me if I told you that your greatest asset is actually your ability to earn an income?
Think about it…
How much did you earn last year?
How many years until you can afford to retire?
Now, multiply these together, and if this amount is greater than the value of your home and car combined…keep reading.
Protect and grow your wealth
As a Financial Adviser who has been around for over 13 years, I’ve found that clients often seek advice regarding growing their wealth, without first realising the impact of not first protecting their wealth.
And they don’t realise how vulnerable their family is until it actually happens to someone they know …or worse… until it actually happens to them.
10 Common Misconceptions about Personal Risk Insurance
1. It won’t happen to me!
Although it may not happen to you, it could happen to you… can you really afford to take the risk?
Did you know that 80% of all Australian have at least one of the following cardiovascular risk factors: Physical inactivity, high blood pressure, obesity or smoking?
And with men having a 1 in 2 and women a 1 in 3 chance of disability or injury in their lifetime, the odds are unfortunately stacked against you.
2. I’m young and healthy…I’ll think about insurance when I get older
You may well be surprised to discover that the average age at claim for income protection is 39.4 years and for trauma/critical illness is 42.7 years.
And even if you don’t end up claiming until later in your life, if you start your policy while you’re young and healthy, you will get a better rate, faster loan application processing times and a policy with fewer exclusions.
3. Medicare and the PBS will cover me
If you get a serious illness that requires cutting edge expensive treatment, you don’t want to have to choose between delaying your treatment or outlaying potentially hundreds of thousands of dollars on medicine that is not yet available through Medicare or the PBS.
4. I have private health insurance
Although private health insurance can help with some hospital and medical costs, it does not cover you for many ongoing additional expenses incurred through rehabilitation.
But most importantly, it does not cover the loss of your income, which would have a terrible impact on your family or even put you at risk of losing your own business.
5. My workers comp or sick leave will cover me
Unfortunately, around 85% of long-term disabilities are caused by chronic diseases which are often not work related and therefore not covered by your workers comp.
And while your sick leave works well for when you have a short term illness, at approximately 10 days per year, it will not be sufficient if you suffer a long-term illness.
6. My super has death cover and salary continuance
Often the default death benefit you have in super is based on a formula, not your individual needs, and 95% of families do not have adequate insurance.
If you don’t meet the SIS super condition of release, you cannot access the insurance claim from your super fund. And if your salary continuance and other personal risk insurance cover is through an employer super fund, you may not be able to keep it on leaving an employer.
7. My life cover will clear my debt when I die
While it’s a huge relief to know you will be able to clear all your debts, your family will still have many ongoing expenses, such as groceries, rates, petrol, school fees & child care.
Will your spouse be able to support your family without you?
8. Insurance is too expensive
Did you know you may be able to take out insurance for a little more than the cost of your morning takeaway coffee? If you are a non-smoking 35 year old male earning $80,000 p.a., just $5.59 a day will obtain you $750,000 life cover, $750,000 TPD cover, $250,000 trauma cover and $4,500 per month income secure cover.
9. I can get insurance cheaper off the internet
At ITL Financial Planning, we can tailor an insurance policy for you with a higher quality contract, with a higher likelihood of claims payout and it will often be cheaper too.
Furthermore, our tailored policies are also structured appropriately for your individual tax and estate planning needs.
10. Insurers never pay claims
The Australian life insurance industry paid more than $7 billion in claims in 2014.
If you need to claim on your policy you’ll be relieved to know that across the industry, only 4% of claims on policies recommended by an adviser are declined, in comparison to 50% of claims made on policies sold by telemarketers or the internet.
At ITL Financial Planning, we will deal directly with the insurers to get your claim paid as quickly as possible. This saves you the time and hassle and allows you to focus on your health and/or loved ones.
Wealth protection is not an easy conversation to have
Let’s face it, nobody wants to think about death or disability.
But because you love and want to protect your family, both now and in the future, it’s an important conversation to have.
At ITL financial Planning we understand insurance and we also understand that your loved ones are priceless.
Life insurance is one way of showing them how much you love them even after you’ve gone.
Which is why it’s important to have the difficult conversations now.
Written by Shereen Churchill (Financial Adviser)
ITL Financial Planning and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. www.fortnum.com.au. Any information on this website is general advice only and does not take into account any person's objectives, financial situation or needs. Please consider your own circumstances and consider whether the advice is right for you before making a decision. Always obtain a Product Disclosure Statement (if applicable) to understand the full implications and risks relating to the product and consider the Statement before making any decision about whether to acquire the financial product.