20 August, 2020 / IN Insurance
Inadequate insurance coverage can severely impact your family’s lifestyle and financial security in the event of an accident, illness or death.
Around 94% of Australians have life insurance (held mostly via superannuation), however recent research indicates the median level of cover is only $143,500. Australians are similarly underinsured for total and permanent disablement (TPD), and two-thirds hold no income protection cover at all.
So that our clients can access the right type and level of insurance cover, we partner with the industry’s leading insurers to offer high-value, tailored insurance products with specialist advice.
We can structure our clients’ insurances so the costs are largely funded out of their superannuation, and often at a much lower cost than what is offered by our clients’ industry super funds for equivalent cover.
To illustrate this, here’s a recent case example of a young family we assisted, who were significantly underinsured for a disaster in the family. Names have been withheld for privacy reasons.
Case Study: Mid-30s, 1 Child, 1 Income
The mother and father are both aged in their mid-30s, and they have one young child. Both are non-smokers.
The mother is a ‘stay-at-home mum’ and the father works in construction earning $150,000 p.a. performing some manual labour. They own their home with a mortgage debt of $600,000.
Previously, the mother had no life insurance and no TPD cover. Through a prominent Australian industry super fund, the father was paying around $400 p.a. for life cover of $293,000, TPD cover of $258,000 and income protection of $2,900/mth.
After undertaking a thorough needs analysis with the clients, we recommended the following:
- For the mother:
- Life insurance cover: $1,980,000
- TPD insurance cover: $1,980,000
- Expected premium: $730 p.a. – for similar cover, her industry super fund quoted $1,585 p.a.
- For the father:
- Life insurance cover: $1,780,000
- TPD insurance cover: $480,000 (for both ‘any’ and ‘own’ occupation TPD definitions*)
- Income protection cover: $9,680/mth
- Expected premium: $2,720 p.a. – for similar cover, his industry super fund quoted $5,873 p.a. (with only an ‘any’ occupation TPD definition*).
* Note: ‘Own’ occupation TPD is the preferred definition, meaning the threshold for a claim is that you cannot perform your own occupation. Under the ‘any’ occupation TPD definition, you would need to be rendered unable to do both your own occupation and also any other occupation reasonably suited to you.
Can We Help?
If you’ve never obtained professional advice regarding life, TPD, income protection, trauma and/or child insurance specific to your current circumstances, you may be one of the majority of Australians who are significantly underinsured, especially if you have children and/or a mortgage.
Fortunately, we can help, and it’s an easy process for our clients. Just contact us for a free, no-obligation appointment to discuss your circumstances and needs, and then we get to work on our report and recommendations.