Wealth Protection

Protecting you and your family: what you need to know

Insuring your car, home or other possessions makes sense. So why do so few of us insure ourselves? If illness or injury stopped you from working for an extended period, could you keep paying your bills? Personal risk insurance gives you peace of mind that if the unexpected occurs, you and your family will be provided for.

Snapshot
  • Did you know that 95% of Australian families do not have adequate insurance cover?
  • Insuring yourself and your family can be the most important thing you do to protect your family.
  • Talking to your financial adviser can help simplify the process so you are only covered for what you need.
What is personal risk insurance?

Personal risk insurance is an important way of assisting you and your dependants to be financially supported in the event of serious illness, disability or death. If your ability to earn an income is affected, a personal risk insurance policy may enable you to maintain your current lifestyle and continue supporting those who depend on you.

Why do I need it?

While we recognise the emotional impact of events such as serious illness or death, the financial consequences can be equally devastating. If the unexpected did occur, having personal risk insurance can go a long way to helping you and your family meet your basic living expenses such as your mortgage, groceries, petrol or school fees. Depending on the event, you may also need
to cover significant medical expenses, rehabilitation, modifications to your home or services to help maintain your lifestyle.

Life insurance

A lump sum payable on death or terminal illness. This can help support your dependants to maintain living standards or pay off debts.

Life insurance can help provide financial assistance for a family if they lose the homemaker or breadwinner. In a business situation, life insurance can help protect against the loss of a key employee or business partner.

Total and permanent disability (TPD) insurance

A lump sum to help support you if you are totally and permanently disabled due to illness or injury.

TPD is designed to help meet one-off and ongoing living expenses, as well as cover special expenses such as medical and rehabilitation costs. To receive a TPD insurance benefit, you must satisfy specific criteria to establish the genuine nature and extent of the disability (this can vary between insurers). These criteria usually include a range of permanently disabling conditions specified in the policy, such as paraplegia, as well as more general criteria relating to your total and permanent inability to work.

Income protection insurance

A monthly income stream to help support you if you are temporarily unable to work because of illness or injury.

Income protection insurance, also known as salary continuance insurance, pays a monthly benefit of up to 75% of your pre-tax salary if you are disabled due to an illness or injury for longer than the nominated waiting period. Income protection benefits begin after a predetermined waiting period (e.g. 30 days, 90 days, or two years) that you nominate when you take out the cover.

Generally, a longer waiting period means a lower premium however it also means you’ll have to wait longer to receive your first benefit payment. The policy will continue to pay the benefit for as long as you remain unable to work up to a maximum predetermined period. This can be a set timeframe such as two years or age based (e.g. up to age 65).

Trauma insurance

A lump sum to help support you if you are diagnosed with a specified major medical condition (e.g. heart attack, stroke or cancer).

Trauma insurance provides a lump sum payment if you suffer a serious, debilitating medical condition (as specified in the policy you choose) such as heart attack, cancer or stroke. Trauma insurance is designed to help people cope with the financial impact of a traumatic event as they recuperate.

Generally, you will receive the trauma benefit provided you survive for a set period after incurring the condition. It is important to note that different policies may have different features and you can access certain types of insurance through your super. Talk to us for the most appropriate insurance to suit your individual and family needs.

What kind of insurance do you need and when?

As your lifestyle and financial position change over time, so do your risk insurance needs. For example, during the years when you are supporting a young family or paying off a large mortgage, you will likely want more protection than later years when you may have downsized homes and your children are in the workforce. The diagram shows what type of insurance may be required most
during each phase of life.

Can you afford personal risk insurance?

When you consider your existing financial commitments and level of savings, how long could you be without an income before you would need to sell the house or change schools? The cost of premiums for any personal risk insurance policy reflects both the risk (probability) of an insured event occurring and specific features of the policy. Some typical risk factors are your age, the state of your health, your occupation a nd the type of recreational activities you participate in.

Some of the policy features may include:

  • the amount of benefit payable upon claiming
  • the waiting period before benefits are paid
  • how long benefits will be paid out for.

Before taking out personal insurance, consider the policy features carefully and seek our professional advice.

Insuring through superannuation

Acquiring life insurance through your superannuation fund can provide some tax concessions which are not generally available for life insurance policies held ‘outside super’. For example,
your superannuation fund may be able to claim a tax deduction for the life insurance premiums for life, TPD and income protection which can be paid for via salary sacrifice contributions (pre tax monies) and the contribution is only subject to 15% contributions tax. This could make it significantly cheaper (on an after-tax basis) for you to insure through superannuation.

Not all types of personal risk insurance is available through your superannuation fund. New rules came into effect on 1 July 2014 that restrict the types of new TPD and income protection policies
that can be purchased through superannuation, while new trauma policies are generally prohibited.

Tax considerations

Salary sacrifice contributions and personal tax-deductible contributions you make to super to fund insurance premiums (along with your other concessional contributions) are subject to the concessional contributions cap ($25,000 for the 2017-18 financial year). If you exceed this cap, the excess is effectively taxed at your marginal tax rate, plus an interest charge.

When insuring through superannuation, if life insurance benefits become payable they attract a tax liability of up to 32% if paid as a lump sum to a non-dependant. However where life insurance
benefits are paid from super as a lump sum to a dependant, they are tax-free. TPD insurance may also be subject to tax if paid from superannuation as a lump sum.

Depending on your situation, you or your eligible beneficiaries may be able to receive life or TPD insurance proceeds as a superannuation income stream, in which case different tax rules will apply. Benefits for income protection acquired through superannuation are taxed at normal marginal tax rates.

The importance of policy ownership

Whether you are taking out risk insurance yourself, with your spouse or with a business partner, ownership of the insurance policy is an important consideration. There are different policy
ownership options available. Each one can give a different outcome in certain circumstances. We recommend you seek our professional advice on the structure that suits your goals and objectives.

Ways we can help you
  • We can help decode the various insurance policies and find the right mix of cover to suit your needs.
  • We outline the pros and cons of waiting periods, different insurance providers and premiums.
  • Based on your current investment portfolio and earnings they can ensure your level of income is protected should the unexpected happen – so your family have financial security and you can recover in comfort.

Download our complete Personal Insurance fact sheet

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Dimos Fessopoulos

Dimos Fessopoulos

Dimos is a Financial Adviser with 9 years’ experience. He takes great satisfaction in helping our clients gain peace of mind by knowing that their financial plans are on track to provide for their current lifestyle and ongoing retirement, along with optimally protecting their assets, and the interests of their families and friends. His friendly, caring nature, developed from his 20 years as a Physiotherapist, puts his clients quickly at ease allowing them to comfortably focus on their future goals and needs.

Dimos is married with 3 sons aged 20,15 and 14. His weekends are therefore spent at various sporting fields as a very keen spectator. He also continues his passion for soccer by coaching representative teams and as a committee member for the local soccer club. Dimos is also a very keen golfer and plays tennis socially.

Dimos holds a Diploma of Financial Services (Financial Planning) and a Graduate Diploma of Applied Finance (majoring in Financial Planning) from FINSIA. Dimos also holds a Bachelor of Applied Science (Physiotherapy) from the University of Sydney.

Dimos Fessopoulos (Director of Financial Planning) is an Authorised Representative of Count Financial Limited. Dimos' ASIC Adviser ID No is 335420.

John Mihail

John Mihail

Professionally, John has 12+ years' experience in financial planning and is a CFP® professional member of the Financial Planning Association of Australia, which is the highest designation in financial planning and recognised internationally. In addition to his CFP® studies, he also completed an Advanced Diploma in Financial Services (Financial Planning) in 2007; and non-financial tertiary studies with a Masters of Health Science (Exercise & Sports Science) in 2002, and a Bachelor of Applied Science (Occupational Therapy) in 2000, both from the University of Sydney.

Outside of work, John is married with 2 young daughters. In his spare time, he enjoys the company of family and friends, follows the success (or suffering) of the EPL's Manchester United, our Socceroos, and the NRL's Bulldogs, while fruitlessly fighting the ageing process through (short) bursts of jogging, swimming, tennis and so on. He also loves a good cup of coffee.

John holds specialist technical accreditations with Count and is authorised to provide advice on Self-Managed Superannuation Funds, Aged Care, Direct Securities, Business Insurance, and Defined Benefit Schemes.

John Mihail (CERTIFIED FINANCIAL PLANNER® professional) is an Authorised Representative of Count Financial Limited. John's ASIC Adviser ID No is 289605.

Yolla Nohra

Yolla Nohra

Yolla Nohra is our Lending & Leasing Manager and she has over 34 years' experience in a variety of roles within Chartered Accountancy practices.

Yolla holds a Diploma of Financial Services (Finance/Mortgage Broking Management), a Diploma of Financial Services (Financial Planning), is an Accredited Mortgage Consultant (AMC) from the Mortgage and Finance Association of Australia (MFAA)and she is also a member of the Credit and Investments Ombudsman (CIO), membership number: 411084.

Yolla holds a Certificate IV in Financial Services (Finance/Mortgage Broking) and is also a SEQUAL accredited Reverse Mortgage Consultant (RMC). Yolla is also a Justice of the Peace (JP). Yolla is a Credit Representative of finconnect™ (australia) pty ltd ACL 385888.

Yolla is very happily married and has 4 children, a daughter, 3 sons and a grandson. In her spare time, she enjoys spending time with her family, cooking, reading and listening to music.

For more information: www.loanmagic.com.au

Winnie Su

Winnie Su

Winnie is a Paraplanner and Practice Manager at CBC and has been at the firm since June 2009. Winnie has over 10 years' experience in the financial services industry and over 2 years' experience in Client Services (Margin Lending).

Winnie holds a Bachelor Degree of Arts (Media and Communications) from the University of New South Wales, an Advanced Diploma of Financial Planning from Kaplan and a Diploma of Teaching from the University of Technology. Winnie is also a Justice of the Peace (JP).

Winnie was born in Hong Kong and emigrated to Sydney at the age of 5, currently living in the south-west of Sydney with her husband and their children. Winnie loves travelling, languages, computers and new technology. She has traveled to Japan several times, working there for a year in total.

Larry Chi

Larry Chi

Larry is our Financial Planning Client Services Co-ordinator and joined the firm in September 2016 shortly after completing a Bachelor of Economics (Finance and Economics) from the University of Sydney. During his time with CBC, Larry has completed a Diploma of Financial Planning in 2017 from KAPLAN.

Larry continues to work as a basketball referee over the weekend and loves spending his time on outdoor adventures with his girlfriend, shooting hoops at the basketball courts and training at the gym. He also enjoys caring for his pet fish and Subaru.

Larry hopes to explore countries around the world and aspires to become a professional in the finance industry.

Lisa Nguyen

Lisa Nguyen

Profile coming soon

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