|
|
|
Insurance
More than 80% of Australians have insurance for their home but fewer than one third of us have income protection insurance* to protect our livelihoods should the worst happen. Whilst claiming on your car insurance may average out to be only once every 7 years, being waylaid by injury or sickness for a lengthy period is not as unlikely as you may think. In fact, a staggering 60% of Australians will be off work due to serious injury or sickness for more than a month at least once in their working lives, according to a 2012 Rice Warner report on under-insurance.
Sadly, many who find themselves in this position are far from financially prepared. The same report revealed more than 50% of couples don't have enough life insurance cover for one partner to maintain their standard of living if the other passed away, while nine out of ten families with dependent children would not be able to maintain their usual lifestyle if the main earner died.
While many view insurance as a grudge purchase, the harsh reality is bad things can, and do, happen – often when you least expect it. What you need to consider is how you would pay the mortgage, household bills and life's other ever-increasing costs if you or your partner passed away or could not work. It seems many Australians, given our comfortable lot in life, are either too reluctant or too busy to contemplate financial protection or feel our funds are better spent elsewhere.
Having some savings, plus adequate income protection and life insurance should be part of every household's personal finance plan. It could mean the difference between getting wiped out or getting back on your feet.
With our extensive contacts, why not get some professional help to determine which insurance products suit your individual needs. We can point you in the right direction through our networks in the insurance industry, to determine which products suit your requirements. Here's a snapshot of what you should consider.
Sadly, many who find themselves in this position are far from financially prepared. The same report revealed more than 50% of couples don't have enough life insurance cover for one partner to maintain their standard of living if the other passed away, while nine out of ten families with dependent children would not be able to maintain their usual lifestyle if the main earner died.
While many view insurance as a grudge purchase, the harsh reality is bad things can, and do, happen – often when you least expect it. What you need to consider is how you would pay the mortgage, household bills and life's other ever-increasing costs if you or your partner passed away or could not work. It seems many Australians, given our comfortable lot in life, are either too reluctant or too busy to contemplate financial protection or feel our funds are better spent elsewhere.
Having some savings, plus adequate income protection and life insurance should be part of every household's personal finance plan. It could mean the difference between getting wiped out or getting back on your feet.
With our extensive contacts, why not get some professional help to determine which insurance products suit your individual needs. We can point you in the right direction through our networks in the insurance industry, to determine which products suit your requirements. Here's a snapshot of what you should consider.
Life Insurance
Life insurance is a lump sum paid to your estate when you die. The larger the lump sum, the higher your insurance premiums. While superannuation funds have a life component, or death benefit, the default payment – which around 90% of fund members rely on – is usually well below the needs of families with dependent children.
Do your sums and consider how much equity you have in your home and any investment properties, how much you owe on your mortgage and any other debts, and how much money you have tucked away in savings or shares. You should also consider your partner's working capacity. If you have insufficient life insurance, chances are they will have to work to help make ends meet.
Many couples make the mistake of just covering the main bread-winner, but stay-at-home partners and parents should have some level of cover too. If they suddenly pass away, the current earner may need to spend more time at home with children and have less capacity to earn.
Do your sums and consider how much equity you have in your home and any investment properties, how much you owe on your mortgage and any other debts, and how much money you have tucked away in savings or shares. You should also consider your partner's working capacity. If you have insufficient life insurance, chances are they will have to work to help make ends meet.
Many couples make the mistake of just covering the main bread-winner, but stay-at-home partners and parents should have some level of cover too. If they suddenly pass away, the current earner may need to spend more time at home with children and have less capacity to earn.
Total and Permanent Disability (TPD)
Usually bundled with life insurance, TPD covers the costs of rehabilitation, debt repayments and the future cost of living if you are totally and permanently disabled. Check if your super fund offers cover in addition to a death benefit and consider whether this amount would realistically cover your family's needs if you were unable to work again.
Income Protection
Income protection, or income continuance insurance, covers up to 75% of your usual income if you can't work for an extended period due to injury or illness. Some employees count solely on workers compensation insurance to take care of them financially if they are hurt, but not all injuries are work-related and workers compensation won't cover serious illness or many other mishaps that might take you out of action. Workers compensation insurance may also not be enough to cover your mortgage, which would still need to be paid whether you have the capacity to work or not.
Premiums vary, depending how much cover you need and are generally tax deductible. As with most insurance products, premiums increase with age because you are more likely to make a claim. Some products, however, offer level premiums where you pay the same throughout the term. A
lot of policy holders reduce their premiums when their kids get older and need less support. You can also save on premiums by taking out a policy with a six-month wait period before you can claim.
Premiums vary, depending how much cover you need and are generally tax deductible. As with most insurance products, premiums increase with age because you are more likely to make a claim. Some products, however, offer level premiums where you pay the same throughout the term. A
lot of policy holders reduce their premiums when their kids get older and need less support. You can also save on premiums by taking out a policy with a six-month wait period before you can claim.
Trauma Cover
Also known as critical illness cover, this provides a lump sum payment if you are diagnosed with a specific serious illness, such as cancer or stroke. There are about 45 diseases that fall into this category for insurance purposes, but insurers may not cover all of them.
Plan Ahead
Life throws curve balls but some events can be planned for. If, for example, you are expecting a baby or need to have an operation, and you know income will be short for a while, take steps to ensure you can still service your mortgage. Your broker can look into options to postpone payments, revert to interest-only for a period or refinance the loan. You may end up paying more in interest by adding to the length of your loan, but you will at least get some reprieve while funds are tight.
You may be looking towards retirement and need to make some more superannuation contributions. We can work with your Financial Planner and put in place the most appropriate funding structure so you can build wealth for your future. Most lenders do not discriminate on age provided there is a suitable plan to repay the facility after you plan to give up work.
You may be looking towards retirement and need to make some more superannuation contributions. We can work with your Financial Planner and put in place the most appropriate funding structure so you can build wealth for your future. Most lenders do not discriminate on age provided there is a suitable plan to repay the facility after you plan to give up work.
* http://www.lifewise.org.au/facts-research
**Tax information: the information in this article does not constitute advice. As taxation legislation is complex, we recommend you speak with your financial advisor, tax advisor or contact the ATO for further details and expert advice regarding your personal circumstances.
**Tax information: the information in this article does not constitute advice. As taxation legislation is complex, we recommend you speak with your financial advisor, tax advisor or contact the ATO for further details and expert advice regarding your personal circumstances.
Home Insurance
Through our partners at Allianz you can relax in the knowledge this is taken care of for you. They insure over 2 million Australian's hence why we've partnered with them. As a special bonus to Omega Finance clients, if you've refinanced with us recently then enjoy a discount of upto 10% when you obtain a quote and take out a policy with Allianz. If on the other hand, you've recently bought a property, then give us a call and we'll have find out how you can get 90 days complimentary cover during your settlement period
Your home is your single most expensive purchase and it's important you look after it. Allianz are experts at arranging cover over the phone instantly are their combined home and contents policies include the following *:
Your home is your single most expensive purchase and it's important you look after it. Allianz are experts at arranging cover over the phone instantly are their combined home and contents policies include the following *:
- Up to 10% discount if you combine Home Building and Contents cover on the same policy
- New for old replacement of contents (regardless of age)
- Guests property covered for up for $5,000
- Up to 30% no claims discount avalaible
- Up to 12 months temporary accommodation if your home is unhabitable following an insured event
- Optional cover to protect your belongings outside of your home
Landlords Insurance
Sometimes tenants aren't quite as careful as you'd like them to be with your property. Allianz can help protect your investment from not only intentional damage but also rent default through this special policy for landlords. Here are just some of the benefits that are included in their policy:
Optional additional cover can be taken which covers:
- 10% discount if your property is managed by a licensed property management agency
- Up to 52 weeks cover for loss of rent after an insured event
- Cover for intentional damage by your tenants which you have building cover and/or contents cover
Optional additional cover can be taken which covers:
- Theft by a tenant
- Up to 15 weeks cover for default on rental payments by tenants up to a maximum of $10,000
- Payment of up to 6 weeks rental loss due to an insured loss
- Legal expenses related to a rent default claim to a maximum of $3,000
