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Personal Insurance
Even the most effective wealth accumulation strategies can fail if they’re not supported by a back-up plan. Building your financial strategy without adequate protection is like building a house without laying foundations.
Wealth21 can assist you with your life insurance by managing the following:
- Reviewing your existing cover
- Identifying your insurance needs.
- Identifying appropriate insurance products and insurance cover.
- Tailoring the amount of cover to suit your budget
- Initiating the insurances on your behalf
- Considering tax implications on premiums and benefits
- Providing advice on estate planning to ensure that the right amount is available at the right time, in the most effective manner.
Insurance Types
There are several different ways of protecting your money, and the strategy you need depends on where you are in your life. To fully protect you and/or your family’s lifestyle, insurance required may include:
- Life Insurance provides a lump sum benefit payable upon your death.
- Total and Permanent Disablement Insurance provides a lump sum benefit if you can no longer work or perform home duties.
- Trauma Insurance provides a lump sum in the event of cancer, heart attack, stroke and more.
- Income Protection Insurance provides a monthly income should you not be able to work.
- Business Expenses Insurance covers business expenses in the event of certain circumstances.
- Children Insurance provides financial assistance for parents when children are sick, disabled or suffer a traumatic event.
For an example of how the various insurances can benefit you and your family, watch this short video prepared by Zurich
Level Versus Stepped
Policies can either be -
- Stepped premiums (renewable each year) – the premium is calculated each year and will normally increase as you get older; or
- Level premiums - the premium stays the same each year until the term of the insurance policy expires.
Premiums for both stepped and level cover will increase with inflation and for policy enhancements.
Which cover is appropriate?
Depending on your age and health, stepped premiums will be cheaper than level premiums for a period of between 6-8 years. Stepped premiums generally start to become expensive in your early 40’s. At this time it is common for people to stop paying premiums when they become too expensive. However, this often coincides when they need the insurance the most.
For this reason we can recommend clients have a combination of stepped and level premiums. The level premium cover portion should be the amount of insurance cover you think you will need at the point in time when stepped premiums become more expensive than level premiums.
Common Insurance Mistakes
By enlisting the help of one of our advisers, we will ensure you avoid these common insurance mistakes -
- Not reviewing your insurance needs.
- Not using the advantages of Life Insurance within Super, when the life insured has dependants.
- Having an ‘Own Occupation’ TPD policies in superannuation.
- Having ‘Any occupation’ TPD policies held outside superannuation.
- Not considering linked policies.
- Over-insurance/Under-insurance.
- Relying solely on your corporate superannuation fund insurance – these benefits may be lost when you leave your employer.
- Having adequate life insurance, but having no plan in place to pass these benefits onto beneficiaries in a tax efficient manner.
