PERSONAL INSURANCE

WHY DO I NEED IT?"

More than four-fifths of Australians insure their car, but less than a third of us insure the source and support of our lifestyles – our income.

 

At a glance:

• Most people insure their cars and homes but how many actually insure their incomes?
• This is often due to people’s aversion to considering the financial impact of an accident
• Insurance isn’t for the cautious. It’s for the realistic and sensible

 

HOW MUCH IS ENOUGH?

 

There are many factors affecting the level of cover you need and there are some questions you will need to answer:

 

• If you were to become too sick or injured to work, how long could you keep your lifestyle and pay your bills?
• If you were to pass away, who would repay your debts? What sort of lifestyle would your beneficiaries have?
• Are you self-employed? If you were to have an accident and were unable to work, how would you cover your business expenses? And what will it cost?

 

TYPES OF INSURANCE IN SUPER

There are three types of insurance typically offered through your super:

 

At a glance:

• Death (including terminal illness) cover
• Total and permanent disability cover
• Temporary salary continuance cover
• Premiums are paid within your fund from contributions
  (pre-tax or post-tax) and/or from your super account balance
• Automatic cover within super is normally offered at basic levels
• You will need to consider: How much is enough?

 

DEATH COVER

 

Death cover, also known as life insurance, pays a lump sum to your beneficiaries if you die or, depending on the super arrangement, become terminally ill.

It can help meet the costs of your mortgage, debts, funeral costs and provide dependants with a lump sum.

 

TOTAL AND PERMANENT DISABILITY (TPD) COVER

 

TPD insurance provides a lump sum to help cover your living expenses and rehabilitation costs if you become totally and permanently disabled. This is only available if you also take death cover.

 

You can only access a TPD insured benefit if you can satisfy the permanent incapacity condition of release. If not, the benefit will be invested into your super account until it can be paid to you.

 

TEMPORARY SALARY CONTINUANCE (TSC) COVER

 

Also known as income protection, this cover provides a monthly income of up to 75% of your salary if you suffer an illness or injury and become unable to attend to your normal duties.

TSC insurance held inside super may provide cover for either a two year benefit period or up to age 65.

 

WHAT YOU NEED TO KNOW

 

• Insurance through your employer’s super is usually negotiated on a group level. This means the premiums are likely to be competitively priced.
• Default insurance cover provides a basic level of insurance and does not involve a medical assessment, but it may not be enough.
• If you want to increase your cover you may need a medical assessment.
• There are tax issues you should be aware of when considering increasing your insurance cover within super compared to outside super.

 

TAXING ISSUES

There are some important tax issues you need to be aware of when deciding between taking insurance inside or outside of super, as it will impact your premiums and the benefit

Establishing a solid Business Insurance strategy helps you to maintain control over your business equity and financial stability.

 

Mint Financial Solutions will create a personalised insurance package to identify risks and threats to the equity in your business (such as the death or disablement of a business partner), and insure your business against the consequences of not being able to work in or manage the business, or death.