Before you consider investing, you should have a sound insurance plan in place. It’s a core need, just like having an “emergency” savings fund.
You cannot control the inevitable risks in life, but you can control how you prepare for them. Levels and Types of risks vary for each individual and business
Please note this information is General Advice only and should not be relied on.
Insurance and the Circle of Life
Insurance requirements vary at different life stages as the circumstances in your life change.
- Your financial goals may alter or shift
- You may feel that the income fluctuates as you switch different jobs
- Over the course of time, your lifestyle changes
- With the passage, your level of savings will alter
- With time, your level of debt will change
- You may have kids and a family to support
- Your kids will grow up and become financially independent
As your circumstances change, insurance products and level of cover do need to be reviewed.
FAQ’s and things to consider
What are my current financial goals?
These financial goals help you in deciding what do you need to protect, and how do you need to protect it.
What is my current financial status, and do I have debts?
Essential to understanding what risks you can retain yourself and those that you cannot afford to happen.
What are the risks that are more considered as threats to me and my financial goals?
Assists in evaluating which insurance you need to understand the likelihood of certain risks affecting you.
How much money do I need? Will one of these risks occur?
To get know how regarding this, will help you establish the level of cover you need for each insurance product you buy.
Should I hold insurance in my Super Fund?
Some superannuation funds automatically provide you with a certain level of insurance. Some of the people expresses that the level of cover provided by superannuation is not enough to meet their needs and benefit declines over time.
Carefully consider if you can access insurance in the event of an insurable risk. For example, trauma insurance may not meet the requirements to be released from super to personal funds.
Who currently depends on my income?
Mentioning such, will help you establish the right type and level of cover you need.
Can I get an early payout if I’m terminally ill?
Most Death cover will pay out a lump sum on diagnosis of a terminal illness when your life expectancy is tend to be less than 12 months; if the payout is made and you then make an unexpected recovery, the money does not have to be returned.
Will things differ if I smoke?
Life insurance companies like their policyholders to be in good health so much that some companies have three different premium classifications: standard, preferred, or preferred plus. You receive more benefits such as lower premiums if you are super-healthy and haven’t smoked in five years. This is because quitting smoking reduces your chances of dying faster. Being just “normally healthy” requires that you haven’t used nicotine in the past three years and still gets you lower premiums.
Should I have Life Insurance inside my superannuation or outside?
There is no simple answer. Having Death and Total and Permanent Disability (“TPD”) insurance covers in superannuation would be beneficial to certain individuals depending on their personal circumstances.
Things to be aware of are:
- Delays in receiving benefit payout as this will go through a superannuation fund
- Preservation and access restrictions
- Taxation of proceeds
- Beneficiary status
- Premium payments are tax effective as they can be made with pre-tax superannuation contributions rather than after-tax salary.
Please click on this link for a table summarising different types of insurance, the benefits, and some things to be aware of.
Download the Risk Insurance-summary table.pdf
As mentioned above, please note this information is General Advice only and should not be relied on.