Ensuring your quality of life

Transcription

1 Ensuring your quality of life

2 Rightway Insurance Services is a personal risk insurance specialist offering Income Protection, Life, Trauma and Total and Permanent Disability insurance.

3 Why is insurance so important? Protecting yourself from financial hardship and the what ifs in life should be an integral part of any financial plan. Nothing is certain, and though it is uncomfortable to think about it could happen to you. Consider this. Every working Australian has a one in three chance of becoming disabled for more than three months during their working life due to illness or injury 1. 32% of Australians are forced into retirement dure to ill health or injury 2 and one in three men and one in four women will suffer from cancer in their lifetime. Of these, one in eleven women will suffer from breast cancer and one in eleven men will develop prostate cancer by age It is important to protect your home and car. And most people do. But it is also important to protect your life, your ability to produce an income, your health and your business interests. This guide will provide you with some information on the different types of life insurance solutions available and together with your Rightway Insurance Services adviser you can develop a comprehensive risk management plan to keep you, your business and your family financially secure. 1 Calculations based on data from Institute of Actuaries Australia (2000) Interim Report of the Disability Committee 2 Australian Institute of Health & Welfare, Australia s Health Australian Institute of Health & Welfare, Cancer in Australia Cancer Council NSW

4 The average Australian earns well over $2million in their lifetime, much more than the value of the average home. And many Australians fail to protect their most important asset their ability to earn an income.

5 Income Protection Imagine you stopped getting paid tomorrow. How long would you be able to cope financially? The majority of Australians have no trouble insuring their home and contents from fire, theft and weather damage. And yet the majority of income earners don t insure their largest asset their income earning capacity. Even more surprisingly, the Investment and Financial Services Association (IFSA) has found that nearly 70% of the self-employed have no disability income insurance even though it is tax deductible! When insurance that protects your largest asset can cost less than your daily cup of coffee, you have to wonder. Your income isn t just about mortgage payments, putting petrol in the car or paying your bills. It s about your future and how much you enjoy it. Without a regular income how can you: Save for your retirement? Send your children to the school of your choice Travel Take a chance on other careers or lifestyles? Some fast facts about Income Protection Income protection insurance will provide up to 75% ongoing income to you in the event you are unable to work due to accident or illness. Income protection insurance is tax deductible. Income protection insurance may pay up to 75% of your pre-disability income. Income protection insurance has benefit period choice ranging from two years to age 65. Income protection insurance has waiting periods ranging from 14 days to 720 days. Income protection insurance is guaranteed renewable, meaning, regardless of claims made and provided you pay the premiums, cover will continue up to the benefit period chosen.

6 Statistics show that death from accidents account for around 5,300 deaths per year, however, death from illness accounts for approximately 124,000 deaths per year 5. 5 Australian Bureau of Statistics 2005

7 Life insurance and TPD It won t happen to me Maybe you re right. Maybe bad things only happen to other people. But that doesn t mean you want to risk being caught uninsured. Though it is unpleasant to think about the what ifs in life, it s important to take the time to evaluate how well you and your family are protected in the event of something unfortunate happening. Where would the money come from to cover the mortgage, school fees, running the car, credit cards, everyday living expenses such as food, clothing, phone bills, gas, electricity and child care. Not to mention funeral expenses and other medical expenses that your health fund simply doesn t cover! Life insurance, or Term Life insurance, provides a cash lump sum in the event of death and in many cases upon diagnosis of terminal illness. What is Total and Permanent Disability Insurance (TPD)? Total and Permanent Disability Insurance (TPD) can be an optional extra on a life insurance policy and covers against a permanent disability. The amount of cover you can buy is usually limited to the amount of life cover purchased. A claim is usually paid as a lump sum, when the disability meets the insurers definitions. TPD insurance covers serious and permanent disablement but does not cover temporary disabilities or many traumas these are best covered by Income Protection and Trauma policies. I have life and disability in my superannuation, I don t need any more! Cover inside and outside Superannuation, what is the difference? Inside Superannaution There is a need to meet a condition of release for total and permanent disability payments. Potential tax implications this may include tax of up to 30% payable on the benefit when payable to non-financial dependedents. Outside Superannaution In most instances benefit paid is tax free.

8 Trauma insurance can lift the financial burden allowing you to do what you most need to do, get better without the fear of financial worries.

9 Trauma or living insurance Trauma or critical illness insurance pays a lump sum after surviving one of a prescribed list of traumatic medical conditions such as cancer, heart attack, stroke etc. Most of us hear regularly about someone who has been suddenly diagnosed with a serious medical condition like cancer, or has suffered a heart attack or stroke. Which makes you realise that no matter how healthy your lifestyle, good health doesn t come with a lifetime guarantee. So you really should think about what would happen to you, and your family, in the event of a sudden trauma or illness. My health insurance or the government will look after me. Medicare and private health insurance do not cover all the costs. Health cover may be limited in the choice and flexibility of treatments. It often does not cover hospital and treatment expenses in full, and some conditions aren t covered at all. Out of pocket expenses such as the cost of a carer and rehabilitation expenses often aren t covered. Government allowances and benefits also don t go very far in covering you against accident or sudden illness. The maximum payment available for any one benefit is $499 per fortnight 6, but most benefits are subject to income and assets tests, so the maximum benefit may be reduced, nor is the income lost from a period out of work. Trauma insurance coversa large range of of medical conditions, for example may include: Alzheimer s Disease Heart attack Blindness Heart valve surgery Burns severe/major HIV occupational acquired Cancer Kidney failure chronic Coma Liver disease chronic Coronary bypass surgery Loss of independence existence Deafness Loss of limbs or eye Dementia Loss of speech 6 Payment rates appear as a guide only and are effective from 1 January

10 How much Children s Trauma insurance you require depends on a number of different factors. Your Rightway Insurance Services adviser can assist you to assess your circumstances.

11 Children s Trauma insurance Children s Trauma is designed to ease the financial pressure on families. Benefits are often spent on medical treatment, rehabilitation, the cost of replacing income if a parent wishes to take time off work, or to take the family on a holiday. Children s Trauma insurance provides you with a lump sum payment should your child suffer one of a list of specified medical conditions or procedures. Payment of the benefit occurs on diagnosis or occurrence of the illness or injury. As with adult Trauma insurance, each insurance company maintains their own list of events which may be covered, including: Blindness Brain damage Cancer Cardiomyopathy Chronic kidney failure Deafness Encephalitis Intensive care Intracranial benign tumour Loss of limbs or sight Major head trauma Major organ transplant Loss of speech Meningitis Paralysis Severe burns Stroke Differences between policies Medical definitions and entry ages vary between insurance companies. Look for a policy that has a continuation option which means that after your child turns a particular age, this policy can be converted to an adult contract.

12 All businesses should consider the use of insurance to compensate the business for any financial loss of cost suffered because an insurable event has occurred with respect to a key person.

13 Business insurance Business Expense Cover can help a business continue operating in the event that the life insured is totally or partially disabled and unable to work. The monthly benefit paid can assist with the day-to-day running expenses of the life insured s business for example salaries, rent or mortgage payments, utilities expenses and many other overheads. Guarantor or debt reduction Insurance When a director signs a guarantee, it generally means the director has secured a loan for the business either directly or indirectly using all or some of his personal assets. The guarantee is usually extinguished only when the debt has been repaid in full. A lender may be able to call on the guarantee in the event of death, disblement or trauma. This type of business insurance ensures that upon the occurance of an insured event the business debt that has been guaranteed is fully repaid. The proceeds may be used to protect the business owners and gusrantors from the ramifications of giving a guarantee for a business loan should an event occur which impinges their ability to make good the liability. Key person insurance A simple rule: if the loss of an employee wouyld have an adverse financial or economic impact on the business, then the employee is a candidate for key person insurance. Some key people may include: Founding business principal Key sales people Employees with unique skills and knowledge Project managers Financial controllers External people - key supplier including service people Rightway Insurance Services specialises in the area of business insurance, please call us for an obligation free appraisal.

14 A buy/sell provision within the Business Succession Plan provides for business continuation with a minimum of disruption by creating ready buyers and sellers at a fair, negotiated price.

15 Business succession planning The key objective of a comprehensive Business Succession Plan is to ensure that the business survives even after the death or critical illness of one of its principals. In simple terms, it may provide: A terminating owner (or their estate) with the option to sell their interest in the business to the remaining owner(s) The funding mechanism for the remaining owner(s) to purchase it. These benefits are achieved by creating a formal agreement. This eliminates concerns by creating ready buyers and sellers at a fair, pre-determined price. In establishing such arrangements, the participants define the circumstances that would trigger the sale and the agreed value of the entity. The most appropriate options will depend on a number of legal and taxation matters, so professional advice in these areas is always advised before implementing a buy/sell agreement. Benefits It: provides the business with every chance of survival ensures the terminating owner (or their estate) receives true value after tax retains key employees may reduce or eliminate Capital Gains Tax (CGT) and stamp duty issues, typically associated with mandatory agreements. How it works? Even with a Business Succession Plan, the remaining owners need money to buy out the deceased s family s interest. A number of funding mechanims are available. The most successful is a combination of Life insurace, Trauma insurance and Total and Permanent Disability (TPD) insurance.

16 How do we handle the personal information you provide us? Guardian Financial Planning holds personal information about you. We hold this information in accordance with our obligations under the Privacy Act. The information has been and will continue to be collected by us for the purpose of providing you with the fi nancial services outlined in this FSG. We are required by the Corporations Act and the Australian Securities & Investments Commission, to ask for this information about you for the purpose of providing you with our services. If you do not provide us with the information requested by us, we may not be able to provide you with the services you require. We may be required from time to time to disclose information about you to representatives of Guardian Financial Planning and other companies within the Suncorp Group and to other professionals, insurance providers, superannuation trustees and product issuers in order to provide our services and arrange for the issue of Financial Products. In the event that the adviser proposes to sell their business we may disclose your personal information to potential purchasers for the purpose of their conducting due diligence investigations. Any such disclosure will be made in confi dence and it will be a condition of that disclosure that no personal information will be used or disclosed by them. In the event that a sale of the adviser s business is eff ected, we may transfer your personal information to the purchaser of the business. You will be advised if a transfer such as this takes place. You are entitled to obtain access to the information we hold about you by contacting our National Dealer Operations Manager. Our contact details are included in the FSG available on this site. Darren Strickland Authorised Representative No Rightway Insurance Services Services Pty Limited Corporate Authorised Representative No Guardian Ltd trading as Guardian Financial Planning ABN AFSL No Postal Address: PO Box 6092 Kington ACT 2604 Office Address: Suite 2 9 Fitzroy Street Forrest ACT 2603 Phone: Fax: info@rightwayinsurance.com.au Important Notice The information provided in this brochure is general information only. It has been prepared without taking into account your individual objectives, financial situation or needs. Before acting on this information you should consider the appropriateness of the information, having regard to your objectives, financial situation and needs. Rightway Insurance Services can assist you in determining the appropriateness of any product mentioned in this brochure. You should obtain a Product Disclosure Statement (PDS) relating to the product/s mentioned in this brochure, and consider the information contained within the PDS before making any decision about whether to acquire the product/s.