There is no doubt that the very thought of claiming on your own insurance policy is depressing, but the research proves that you (and even me) may be unable to work for an extended period during your working life due to sickness or an accident. The problem is that nobody has any idea of when that might happen. Please try to fight the urge to stop reading now and ‘worry about it later’ because there is an important message here. 

It’s a confronting topic that makes us think about our own mortality. However, as a financial adviser I have helped many clients through the process. The worst can happen to anybody. If it does happen to you, you want to make sure that:

i) you took due care (supported by advice and help from someone in the know) when preparing your initial application, and
ii) that you actually have the cover in place. The first question after, ”are you ok?” is often, ”do you have insurance?” If you think your answer would be, ”I think so” or  ”no”, please stop now and consider how your family would cope in this situation, or more to the point, how would you cope financially if something happened to a beloved family member?

Before you get to that point, where do you start if you don’t have cover? 

Firstly, at Leenane Templeton you can talk with Roger Ward a licensed financial adviser who specialises in Personal Risk Insurance. The application process is so important to ensure a stress-free outcome in the event of a claim. It has to be done right; and the conditions and definitions (the boring stuff) must be spot on. Don’t be satisfied with approval of cover that required very little in the way of medicals or blood tests. You may think you have cover but it’s a nightmare to be told at claim time your application is rejected because you ‘broke the rules’ since you forgot (often genuinely) to tell the insurer something small but now seemingly crucial. 

A professional adviser like Roger will ensure you have insurability from the very moment the cover is granted. Yes, you will have to pay for that advice, but believe me it’s invaluable. As I say, the last thing anyone wants when they have suffered a serious injury or have been diagnosed with a life-threatening illness is a delay.  Or worse still, have any doubt the claim will be paid.

This is where the role of an adviser throughout is so important. Your adviser will know someone ‘higher up’ and ‘in-house’ who can back them up through the process. That means, it’s not only your adviser who is onto the insurance company but their contacts, who are often part of a large Head Office which the insurer does not want to get offside. This alone is a huge factor over buying insurance ‘online’, because who will be there to back you up?

Roger is ready to answer any questions about insurance you may have. 
Call (02) 4926 2300 or email us. 

Please don’t put the insurance talk off any longer – and this is the pulling on the heart strings part – do it for your kids and family if for nothing else. 

The post Insurance – Don’t go it alone appeared first on Newcastle Financial Planners & Financial Advisors.

Your most important asset is your capacity to work and generate an income. If you are unable to work due to sickness or injury, how would you continue to meet your financial obligations and continue your present lifestyle?

Being unable to work due to sickness or injury is a very real and frightening circumstance. Six in ten Australians will be disabled for more than one month during their working life and one in four will be disabled for more than three months. Despite not being able to earn an income, your financial commitments will continue despite the fact you are not working. Risk needs to be managed to ensure that you can continue to support yourself and your family during the time that you are incapacitated. Personal risk insurance is one way of managing this risk – income protection provides a monthly income stream to compensate for your lost income when you are unable to work due to sickness or injury.

Income protection premiums are generally tax deductible as the premiums represent the cost of protecting your income stream. The benefit of the tax deduction is tied directly to your taxable income and can represent a substantial reduction in premium in your after tax cost.

As you approach the end of the financial year, reviewing your current income protection needs may have an added tax incentive. After discussions with your planner, you may be able to pay for the annual cost of cover in this tax year and secure a full tax deduction for the cost of cover.

Income protection premiums may be funded using your accumulated superannuation balance – meaning you do not have to fund the cost of premiums from your earnings or savings.

Income protection insurance inside superannuation offers a cash flow advantage by using the accumulated balance in your superannuation account. This strategy does not require you to pay any additional premium from your earnings or savings. Your financial planner will arrange the payment of the income protection premiums from any superannuation account whether directly in your current fund, or via a rollover to the income protection policy.

It is important to note that income protection inside superannuation is not always appropriate and needs careful consideration from your planner. Using your superannuation account balance to fund an income protection insurance premium will erode your retirement savings – the impact of such needs to be discussed to ensure you can still meet your retirement goals.

Your financial planner will talk to you about the limitations that exist when funding an income protection premium through superannuation. There may be some benefits that are important to you that cannot be offered through superannuation. In this case, you may be able to split the cost of your income protection premium using superannuation and after tax earnings. In this scenario, your superannuation account can fund up to 95 per cent of the total premium, ensuring that there are still significant cash flow benefits in this model.

Few consumers have the ability to navigate through the opaque and complex taxation and regulatory rules relating to income protection. However, it is vitally important for all income earners to consider what happens if they are incapacitated, and how to manage this risk. A discussion with your financial planner will help you to formulate a strategy that is both appropriate and cost effective.

Source: TAL.

Call (02) 4926 2300 or email us.

To discuss protecting your income and types of insurance available to you, please do not hesitate to contact the specialised risk management team at Leenane Templeton.

The post Protect your income and reap the tax benefits appeared first on Newcastle Financial Planners & Financial Advisors.

Many people go through enough pain and grief when dealing with their illness or injury, let alone the stress that comes along with not having an income to support their family. That’s why it is important to ensure you have the appropriate risk insurance or risk cover in place.

Risk Insurance A Claimant's Story

Geoff and his adviser David’s real names have not been used to protect their privacy.

Geoff thought the world was at his feet as he prepared himself for retirement, until he was diagnosed with a life threatening illness.

The following is an extract from a letter Geoff’s insurance provider received from him…

Six weeks ago I was diagnosed with bowel cancer and secondary liver cancer.

My initial diagnosis was three to six months and I was facing the possibility of a major operation to remove the cancer in my bowel. By the afternoon, after my second visit to the specialist, my life expectancy had been reduced to between six weeks and three months.

I phoned my insurance adviser David, who I had known for 19 years and who had originally assisted in putting my insurance cover in place. Within three days of submitting a claim, I received my first payment of $653,535 and then another payment which brought the total payment to over $1.2 million.

Although I have not met the people who have been involved, David kept me informed of everyone’s efforts to ensure that my claim was processed in the most efficient manner. I am sure this has a lot to do with the excellent relationship that he has with my insurer and the fact that the right advice was given in our situation.

I would like to express our thanks for relieving me of the financial burden and worry that I would have faced if I did not have this cover.

The payments from his insurance enabled Geoff to obtain an expensive medical treatment from Japan, only available to a few patients around the world. After taking this medication for over six months, Geoff was recently informed that his once-inoperable cancer is now operable.

This surgery will hopefully extend Geoff’s life expectancy significantly, enabling him to spend more time with his family.

Speak with your financial planner today to ensure you have adequate risk cover in place.

Source: AIA Australia Limited, June 2011

Our Newcastle Financial advisors are happy to help discuss your risk cover needs and risk insurance options.

Risk Insurance

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