At Invest Blue we’re here to help you protect you and those you love.
It’s a cliché, but it’s true: people should expect the unexpected. It’s not something you want to think about all the time, but the reality is that throughout your life you’ll experience a number of unforeseen events that will affect your happiness and security. You don’t want to leave it to chance.
Insurance is designed to provide you with financial protection and assistance for events that can impact your financial position.
The latest statistics reveal that 95 per cent of Australian families do not have adequate levels of insurance. This figure is particularly alarming given that one in five families will be affected by the death of a parent or a serious accident or illness that will render a parent unable to work*.
Failure to cover these risks may result in an inability to maintain your desired lifestyle and to achieve your goals and objectives in the event of unforeseen occurrences.
The process of trying to get the right insurance in place can be overwhelming. You just need to turn on the TV or read a paper to see the barrage of advertisements promoting an array of insurance products. Invest Blue will help make the process as simple as possible by listening to your requirements and helping you identify how much you will need to protect you and those you love with a financial safety net in the event that the unexpected occurs.
Invest Blue has access to a large range of insurers and can tailor your level of cover, benefit period, payment option and other plan options to suit your own circumstances. We help you understand the types of personal insurance that may be appropriate for your circumstances:
Provides a lump sum in the event of the insured’s premature death.
It is intended to:
Total and permanent disability insurance
|Provides a lump sum if you suffer a total and permanent disability and are unable to work again or unable to perform basic daily living activities.
Why do I need TPD?
Trauma or crisis insurance
|Pays a lump sum if you suffer or contract a critical condition specified in the policy (eg heart attack, stroke, cancer).
Why do I need trauma insurance?
An example is best used to illustrate the effectiveness of having trauma insurance in place. Suppose you have a mild heart attack and are seriously ill but you are able to return to work after two months. It is possible that you will not be as productive as before, or be able to manage the stress associated with working to your previous levels again.
Income protection insurance
|Provides you with a monthly payment (usually up to 75% of your income) if you are temporarily unable to work due to disability.
This is defined by the Total and Disability definition of the policy. This definition varies depending on the policy. It can be based on such things as:
You may not know what life is going to throw at you but one thing you do want to know is that you are covered in case of adversity. Having the right insurances in place will provide you with that peace of mind.
You can gain access to cover either inside or outside of superannuation.
To determine the amount of cover you will need, your Financial Adviser will do a wealth protection analysis. Here is an example of an analysis.
Meet Sam & Kelly
Sam is 40 and a self-employed Accountant. Kelly is 38 and responsible for home duties. They have two children. Once the level of cover required has been determined, the next step is to consider any assets that could be disposed of (sold) to reduce the amount of cover required (ie. superannuation, investments, cars, boats etc).
If Sam paid the insurance premium outside super, he would need $2,238 in pre-tax income to cover the cost of the premium. The benefit of the “inside super” strategy means that Sam only needs $1,354 in pretax income to cover the cost of the premium. The difference is that Sam saves $884 on his premium cost ($2,238 outside super minus $1,354 inside super).
Purchasing insurance — inside or outside super
With the help of their Financial Adviser, it has been determined that Sam will require a $1,549,000 life insurance policy. Based on Sam’s personal details and the recommended sum insured, the annual premium for the required level of insurance cover is $1,354 p.a (paid monthly).3
Sam can personally own the cover at a cost of $1,354 p.a in the first year. In the table below we compare paying for this insurance premium outside super versus salary sacrificing into super to cover the premium:
Natural disasters are unpredictable. So is the threat of theft and burglary. And accidents happen.
General Insurance is vital for protecting the valuable possessions that you have worked so hard to establish. Having the right amount of coverage is just as important.
Invest Blue offers a general insurance service through our alliance with Amicus Insurance Service Pty Ltd.
What you need to know
1 Sources: AMP.NATSEM Income and Wealth Report Issue 4, Cancer Council Australia — www.cancer.org.au, AIHW–Australia’s Health 2008 — www.aihw.gov.au, Heart foundation — www.heartfoundation.org.au, Australian Bureau of Statistics — www.abs.gov.au.
2 Source MLC — based on Australian Life tables 2003-053 Based on $1,549,000 AMP Flexible Lifetime Protection premium for an insured male aged 41 next birthday, non-smoker.4 Assumes that no deduction for the premium for the ordinary policy applies and that the super fund can claim a full deduction for the premium. A tax credit is not available where premiums are funded with non-concessional contributions.All income tax rates are those applicable in 2009/10We assume that the insurance benefit will not be subject to income tax (i.e. it will be paid as a lump sum to a dependent fortax purposes)
This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.