Financial Planning
Insurance
Have you insured your biggest asset? Are you sure?
For many of us, we automatically think of our family home as our biggest asset but in reality our income is often worth a lot more over a lifetime than our house ever will be. In fact a modest wage of $60,000 for 30 years is $1.8million.
You wouldn’t buy a house without insuring it, yet many individuals have high professional income from long years of hard work and study which is completely uninsured, or dramatically underinsured.
We regularly hear from individuals that they are under the impression that their income protection, trauma, TPD and life insurance is sorted by their superannuation fund. However, this is often not the case.
Many superannuation fund’s income protection policies cover the member for 2 years only. If you’re in your early thirties, you have thirty years left to work. An injury that will affect you for the rest of your working life will not be adequately compensated by two years of income protection insurance.
In addition, there can be difficulties claiming on insurance policies held inside superannuation if your injury affects your ability to do your own occupation, but could still allow you to work in a different occupation.
A Squared Wealth is able to review your current insurance requirements, along with the available products on the market to ensure your income is adequately protected, and you have appropriate policies in place if you do suffer a trauma or total permanent disability. We are also strongly placed to determine the extent (if any) your products should be held directly or in superannuation and are able to appropriately structure the policy ownership to ensure you can claim when you need to, obtain optimal tax deductions and balance the needs of your day to day cash flow considerations.
If you have not had a professional insurance review in the last three years, you should consider doing that now.
And if in your head you just said to yourself, yeah, that’s a good idea but I don’t need to do it until I buy a house, have a child, get my next payrise… well I’ve heard all that before too. Unfortunately, with personal insurances there is usually nothing to gain by waiting but a lot to lose. The longer you wait the higher the probability that you or an immediate family member will develop a condition that becomes an excluded pre-existing condition or increases your premium. Unfortunately, none of us hold a crystal ball, so protecting the assets you do have as soon as you are able to is important.
