INSURANCE TYPES

and how they help you!

 

LIFE INSURANCE

Life Insurance provides insurance cover that pays a lump sum benefit to your estate if you die during the period of cover.

If you're the main income earner in the family, life insurance can help provide a stable financial future for your loved ones if you pass away prematurely. It can help your family cope with major household expenses, such as paying off the mortgage, education costs and funeral expenses.

 

How much cover do I need?

Most people review their life insurance at key stages during their lives:

 

· getting married

· arranging a mortgage or a loan

· starting a new job

· the birth of children

· buying a house

· establishing a business

 

Clive is equipped to advise you in all situations. He can assist you to determine the amount of cover you require, arrange quotes and advise on matters like whether you should take a joint policy with your partner.

 

INCOME PROTECTION

Income Protection insurance is probably the most essential type of insurance cover because your income determines your standard of living, your ability to build wealth and your capacity to provide for retirement.

 

It provides you with an income should you become unable to work due to an injury or sickness. Benefits are normally paid monthly. The amount of cover is usually restricted to 75% of your pre- tax income, this income when you are on claim, is then assessable because it replaces lost “assessable” income.

Premiums therefore become tax deductable in most cases

 

The choice of cover depends entirely on your individual circumstances.

Because of the number of choices, advice from your qualified Insurance Agent is essential.

 

For example:

- Benefit periods can vary from 1 year to age 70

or lifetime with some companies

- Waiting periods (the time before a claim is paid) can range greatly

from 7,14, 30,90 or 180 days up to 24 months

- Maximum benefit calculations for self-employed people can be

complex due to income deductable expenses.

- Claims benefits can be escalated in line with inflation

- Your occupation determines your premium and some companies exclude some occupations altogether

- Policy definitions can vary greatly between companies especially the definitions of "total disability" and the

differences between “own occupation” and “any occupation” and "Indemnity” vs “Agreed Value”

- Premiums can be “Stepped” or “Level”

 

As you can see there are many variables to take into consideration, knowing about your personal wants and needs will allow us to provide

the most cost effective and quality contract for the protection of

you and your family.

Because this product has many options and benifits, it needs to be tailored to your specific situation taking into consideration your age, gender, occupation and health. This is why it is essential to get advice from Clive.

 

TRAUMA INSURANCE Also called CRITICAL ILLNESS

Trauma insurance pays a lump sum in the event that you suffer a major injury or illness such as heart attack, stroke or cancer.

These events are specified by the Insurance company and vary in

number from approx. 25 to 45 defined events depending on the

insurance company chosen

 

This type of cover is designed to help you cover medical expenses associated with the trauma and other costs that your family may be exposed to. Also, it can often be combined with Life and/or Total and Permanent Disability (TPD) cover at a discounted price.

 

Basically trauma insurance fills in the gap between life insurance, TPD insurance and income protection insurance.

 

It is usually purchased as an additional option on another policy but can be purchased on a “stand alone” basis.

 

For example, an insured person who suffers a mild stroke and is able to return to work after 3 months would not be able to claim under their life insurance or TPD and may also not be able to claim under their income protection policy, but would be paid a lump sum under a trauma policy.

 

TOTAL & PERMANENT DISABILITY

Total and Permanent Disability (TPD) cover is life insurance that pays out if the insured person becomes Totally and Permanently Disabled.

 

In the event of a claim, the TPD payment can be used to eliminate debt, pay ongoing medical expenses, make necessary home modifications, or hire home care services such as nursing, cleaning and cooking.

 

It is usually purchased as an additional option on another policy but can be purchased on a “stand alone” basis.

 

KEY PERSON INSURANCE

Providing financial protection against lost revenue, profits and the capital value of your business should a key person suffer a major illness, injury or death.

 

Key person insurance (also called Key Man Insurance) is a type of Corporate - owned life insurance which insures an employer against the death or incapacitation of a so - called employee, usually an executive or partner. It is used by both large companies and small partnerships alike.

 

An employer may take out a Key Person Insurance policy on the life or health of any employee whose knowledge, work or overall contribution is considered uniquely valuable to the company. The employer does this to offset the costs (such as hiring temporary help or recruiting a successor) and losses (such as a decreased ability to transact business until successors are trained) which the employer is likely to suffer in the event of the loss of a key person.

 

The key person may be an executive, principal shareholder, a senior scientist or a particularly effective salesperson.

 

Smaller companies with partners may use it to protect each partner.

 

For example, if a partner of a firm passes away, usually the other partner or partners need to purchase the shares in the business from the family of the deceased.

 

Having insurance permits this to be more easily facilitated where the correct Buy / Sell Agreements are in place.

Buy / Sell Agreements are a written agreement the business enters into to determine each shareholders plans, should any of them unexpectedly suffer a major illness, injury or death. The cover required is usally determined by the size of the business and the person that is to be insured. The sum insured can range between $500,000 and $10 Million of cover.

 

BUSINESS EXPENSES INSURANCE

Business Expenses insurance is like Income Protection for your business.

 

It enables your business to continue to operate if you are temporarily disabled and unable to work.

 

If your business stops operating, your income might be covered by Income Protection, but if the ongoing expenses of the business - for example rent, business mortgage or loan repayments, equipment leasing costs and utilities payments aren’t covered, the owner might need to use the income protection proceeds to pay those, to keep the business out of bankruptcy.

 

Ideally, a business owner would have the business’s net profit covered by income protection, any loans covered by life insurance possibly with some TPD & Trauma cover and the expenses covered by business expenses insurance.

 

SUPERANUATION (Retirement Planning)

Retirement planning should start as soon as possible after you start working because the longer you delay, the fewer options you will have and the harder it's going to be to reach your retirement income goal.

 

While 65 years is often considered the "official" retirement age, there's a growing variation in the ages at which people stop working.

 

At About Insurance we can work with you to determine your statistical life expectancy (and therefore how long your retirement income will need to last), the lifestyle you want to have in retirement, the expenses that may still need to be covered and the likely impact of inflation.

 

With this information in hand Clive will discuss the various investment options and your risk tolerance level

 

MASTER TRUSTS/WRAP ACCOUNTS

Master trusts (and wrap accounts) are managed investments that allow you to pool your money with other investors to create a fund large enough to access wider investment opportunities or save costs.

 

Even though your money is pooled with other investors', you still keep some control over your own investment. It's usually easy to switch investments or change your strategy at any time by instructing your adviser or the master trust or wrap account operator. Sometimes you can do this over the phone or through the Internet.

 

Some trusts offer you hundreds of different investment choices. Some of the popular choices you may be offered include:

 

·Cash management trusts

·Property trusts

·Australian equity (share) trusts

·International equity trusts

·Agricultural schemes (e.g. horticulture, aquaculture etc)

·Some film schemes

·Timeshare schemes

·Some mortgage schemes

 

Clive can help you :-

 

·Understand the fee structure

·Explain the different features

·Advise on the future flexibility of your investment

 

FINANCIAL PLANNING

The role of your financial planner is help you determine and assess your financial goals, taking into account your individual circumstances and aspirations and the options available.

 

In other words financial planning helps you determine where you’re going - what you want for your financial future and then it helps you make it happen.

 

It is an ongoing process that takes into account your income, assets, liabilities, and personal views like your values, dreams, wants, needs, time horizons and your attitude toward risk and reward, the result is a custom-tailored strategy that can help you:

 

·Maximise your investment returns

·Make your retirement years more comfortable and secure

·Handle your day-to-day finances faster and easier

·Increase your savings and optimize the growth of your wealth

·Improve your cash flow for a better balance

·Minimise the taxes you pay

·Accumulate funds for special goals, like higher education for children

·Look after your dependents in case of death or disability

·Estimate your insurance needs

·Have more confidence in your financial decisions

·Transfer the assets of your estate to your heirs in the most effective way