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Don’t Lose Your Life Insurance!

 

Did you know that hundreds of people each day in Australia are unintentionally cancelling their life insurance!

How is this possible?  This is occurring due to the popularity and growth of self-managed super funds (SMSF’s).

An SMSF is basically a do it yourself superannuation fund that allows you to invest and save for retirement.

The purpose of an SMSF is no different to any other super fund however requires more of a hands on approach.

There is greater flexibility in relation to investing within your fund, however with this comes greater responsibility.

So what does all this have to do with losing your life insurance?

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Insurance Options – Industry Superannuation Funds.

 

Superannuation has definitely come a long way since it was first introduced by Paul Keating & the Labor government back in 1992.

Back in those days the average person on the street didn’t know the meaning of the word.  Today it has become the primary investment vehicle used to save for retirement.

There are several different types of super funds available including industry funds, retail funds and self managed super funds (SMSF’s).  Most people are familiar with industry super funds as it is common to be a member of one if you are an employee.

Currently your employer needs to be contributing 9.5% of your salary into a default fund or super fund of your choice.  This is known as the superannuation guarantee (SG) and is expected to increase to 12% by 2020.

As mentioned above, the main purpose of super is to provide a lump sum payment on retirement.  Industry super funds have evolved over the years and now also offer risk insurance to their members.

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Seven Ways To Save Money On Your Personal Insurance!

 

2016 has definitely been a challenging year for many people!

A combination of an increase in the cost of living together with financial global uncertainty has lead to a re-thinking of our financial situations.

A number of Australians have changed their habits from spending to saving which is great, however this has obviously had an impact on the retail environment.

Household budgets tend to be reviewed during such times to see if there are areas where spending can be reduced.

Unfortunately most people view personal insurance as a discretionary spend so therefore it tends to be the first expense that gets the chop.

Cancelling your income protection or trauma cover only exposes you to greater risks on top of your current financial worries.

If times are tight at the moment can you imagine the uphill financial struggle of temporarily or permanently losing your ability to earn an income!

For this reason I strongly recommend that you do what you can to try and reduce your costs associated with your personal insurance, rather than cancel your cover.

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Key Person Insurance ….. Financial Protection For Your Business!

 

Did you know that every week a business is forced to close it’s doors due to the temporary or permanent loss of a key employee?

One of the biggest mistakes that business owners make is that they fail to insure the people who contribute towards the profitability of the business.

Business owners wouldn’t think twice about not insuring their physical assets or not having liability insurance in place, so why are the key employees of the business any less important?

Key person insurance is mostly suited to small to medium sized businesses however usually excludes sole traders.  This is because the loss of a sole trader would result in the business failing to exist.

Key person insurance is therefore personal insurance that is taken out by a business on the life or lives of it’s key people.

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Personal Insurance ……….. Inside or Outside of Super?

 

Each day more and more people are finally starting to see the value of financially protecting their income and their lifestyle through personal insurance.

There are two main ways a personal insurance policy can be owned.  Either directly with a life insurance provider or indirectly through a superannuation fund.

Ownership within super has become very popular in recent times as there are advantages in holding your cover within your fund.

Before getting too excited about the advantages of insurance within super, you must also consider any possible disadvantages of holding personal insurance within the superannuation environment.

I will quickly discuss the pros and cons of both options to give you a better understanding, however proper advice should be sought as it can be a complicated issue.

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Pay Your Life Insurance Premiums Through Your SMSF!

 

Self Managed Super Funds (SMSF) are gaining in popularity offering another super fund option for those wishing to save for retirement.

There are approximately 450,000 funds in Australia with assets in excess or $400 billion, so the SMSF market remains strong.

Superannuation is basically a long term savings vehicle that offers a choice of different investment options in order to provide an income stream in retirement.

The main draw-card with super relates to the tax incentives and advantages offered to those who contribute and invest within their fund.

In addition to these tax incentives, SMSF’s also provide greater flexibility and options in regards to investing when compared to industry funds.

There are many strategies incorporating shares and property that can be implemented within your super fund to help you maximise your returns.

Another strategy that can benefit the member includes holding and funding your personal insurance through your SMSF.

There are quite a few members who are still unaware that insurance can be held within their fund.  Recent changes have made it compulsory to consider personal insurance as part of the overall investment strategy.

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How Much Life Insurance Do I Need?

 

Ok, so you are ready to organise some life insurance!

The question now is “how much do I need?” The answer is different for each person as everyone’s personal and financial circumstances are different.

Once again this is where the value of advice comes in as you are not expected to know exactly how much cover is needed.

The concept behind any insurance is to leave an individual, family or business in the same financial position after a loss as they were before the loss occurred.

Having some cover in place is better than not having anything at all, however it is my job as an adviser to ensure every scenario has been considered.

As a rule of thumb there are two areas that need to be discussed.  The reduction or elimination of debt, and an ongoing income stream for the surviving dependants.

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