Ignore this at your loved one’s peril

Australians are chronically under-insured.

Most people insure their cars and homes, but don’t insure their most valuable asset… themselves and their ability to produce an income.

Far more people lose their homes due to the main breadwinner being unable to earn an income (either because they die or are sick or injured for an extended period) than from house fires. Yet we all insure our homes!

Please don’t get me wrong… it would be mad to not insure your home and your car, but it makes EVEN MORE sense to insure yourself.

Think about it in terms of a car. People fork out hundreds of dollars a year on car insurance policies to get possibly $30,000 or $40,000 if their car is written off. Think about the potential lost income if the person driving that car dies or is injured and cannot work for an extended period (or potentially never again).

How would your family be impacted if you no longer had an income?

This all comes down to what is considered ‘normal’. In Australia, insuring your car is just what you do. Insuring yourself is something most of us don’t even think of.

Let’s work together and change that to make sure you and your family are protected. This is your back-up plan! Everyone should have a financial plan and a key part of any good plan is having a back-up plan in case plan A falls through.

Chances are you will live a long life and be able to earn an income for the majority of your working life. But should something go wrong and that not be the case, how do you and your family replace that lost income?

Centrelink? Minimal support, no chance of replacing what you were able to earn working!

Workers Comp? Potentially for a little while, but only if it is related to work.

Parents? Many of them will be struggling to fund their own retirement, let alone support you and your family if you have no income.

Your partner? Sure, they can work, but if you’re a two income family, what does life look like with one income missing. Potentially your partner may need to reduce hours of work to care for you so that one income could be much less.

The solution: you outsource the risk to an insurance company. In exactly the same way you outsource the risk of paying to replace your car to a car insurance company, you can outsource the risk on your life and income to a life insurance company.

Life insurance can be paid for out of your superannuation and income protection premiums are tax-deductible and actually much cheaper than you might expect in most cases.

Don’t scrimp when it comes to protecting you and your family though! You could buy the cheapest, dodgiest insurance going around, but find that when it comes to claim, the insurance was worthless. Or you can invest a little time and money to get proper protection in place.

You could get help from a financial adviser who gets paid commissions, but you risk working with someone driven to make a sale rather than recommend what is best for you. Or you could work with an independent financial adviser who does not accept commissions, meaning your premiums will be 30% lower than they would otherwise be, and incorporate your back-up plan into a broader review of your financial situation.

You have many choices in life. This is one of them… ignore having a back-up plan at your peril!

Cheers,

Daniel


If you’d like to find out more about how INDEPENDENT financial advice could help you manage cash flow, pay off the mortgage faster, get the most out of super and invest wisely, then get in touch on 0411 484 464 or head to wealthtrain.com.au.

Daniel McGregor is the man behind Wealth Train and is a member of the Independent Financial Advisers Association of Australia. This advice may not be suitable to you because it contains general advice which does not take into consideration any of your personal circumstances. All strategies and information provided are general advice only.

Daniel McGregor and Wealth Train are authorised representatives of Independent Financial Advisers Australia AFSL 464629