Life is full of surprises and uncertainties. Unfortunately these can sometimes cause you and your loved ones physical and financial harm.
That's why personal protection is important. No matter what happens in life you can ensure that you are able to cope financially.
Insurance in Super The cost of insurance in super will not affect your cash flow requirements as the premiums will be paid by your superannuation fund. In the event of a claim on insurance in super, the proceeds of your superannuation fund including the attached insurance cover, paid as a lump sum, can be taxable. The following table highlights how tax will apply. 
Under the legislation a ‘dependent' is defined as a person you have a relationship with who lives with you, a former spouse/defacto, your children (aged under 18), or any person(s) financially dependent at your date of death. An adult child (not dependent on you for financial support) is classified as a non-dependent. If you are self employed, insurance cover can be of benefit if held through your superannuation fund. It is a tax effective method of obtaining cover as you are eligible to claim a tax deduction for the superannuation contributions you make. Income protection cover held under superannuation is generally less expensive than cover held personally. The cost of the cover is met using your accumulated superannuation benefits and therefore will not impact your after tax income. Should you make a claim, any benefits paid from the policy will be considered taxable income. Should you make a claim, any benefits paid from the policy will be considered taxable income. Previously superannuation funds could only claim the cost of insurance premiums as a tax deduction for income protection cover if the benefit period was no longer than 2 years. On 28 March 2007 it was determined that superannuation funds could claim the cost of premiums regardless of the length of the benefit period. An added benefit Income Protection in superannuation is that it also allows for an additional amount to be paid into a superannuation fund of your choice, which effectively provides you with additional cover. Back to top^
Income Protection We believe short-term periods of incapacity through accident or illness can have a very significant effect on your long-term investments and savings. Based on the information provided by Mr. George Street, this report provides three possible scenarios to illustrate the point. George, you have indicated that the total family income is $40,000, of which you are the sole income earner. You have indicated it is costing you 90% ($36,000) of your total income to meet normal living expense and taxation etc. We have assumed the balance of your income ($4,000.00) is being invested and have assumed a 3% inflation rate and that your investments will be earning an average of 8% in the future. Your age is 41 and we have selected a target age of 65 to illustrate the potential growth of your investment account as follows and illustrated in the graph below. 
This graph illustrates three potential future scenarios; two of these are based on the illustration of what may be the outcome if you had time off work as per the following table. Income Lost Periods
The graph illustrates the potential future scenario based on the following facts and assumptions: - - The Green Line (Top Line) = Uninterrupted regular investment. ($344,671)
- The Blue Line (Middle Line) = the growth in the investment account if insurance protection is taken to minimise loss of income. ($289,398)
- The Orange Line (Bottom Line) = the effect of uninsured periods of disability will have on the long-term results. Refer to the Income Lost Periods table for the periods of work assumptions. ($138,531)
With no Income protection cover your potential loss of funds under investment is $206,140. With Income Protection your potential loss of funds under investment is $55,273. Premiums for income protection insurance are tax deductible and the benefits paid based on assessable income. IS YOUR ‘GREATEST ASSET' INSURED? Please Note: the above scenarios are for illustration purposes only and are not fully inclusive of all circumstances. Please contact us for a full review of your Insurance needs. Back to top^
Trauma Insurance Trauma cover will provide you with funds to assist in meeting medical and other costs that can arise should you suffer a specific trauma, i.e. heart attack, stroke or cancer; by providing you with a lump sum cash payment. 
This graph illustrates a potential future scenario based on the following facts and assumptions: - George you are 41 years of age and have a current annual salary of $35,000. In the event of you suffering a critical illness you would like to provide you and your family with an ongoing income of 100% of your current income, indexed at 3% per annum. You would like the ongoing income for you and your family to run for 5 years, assuming a long-term investment rate of 8% per annum. You indicated your current liabilities and emergency expenses would be $154,500. You estimated there is currently $50,000 available from other cash reserves. DO YOU KNOW SOMEONE WHO HAS SUFFERED A SERIOUS ILLNESS? Please Note: the above scenarios are for illustration purposes only and are not fully inclusive of all circumstances. Please contact us for a full review of your Insurance needs. Back to top^
TPD Insurance Total and permanent disability (TPD) cover provides a level of financial security to you and your family if you are unable to work due to long term illness or injury, and can reduce financial hardship. It provides you and your family comfort in knowing you would be afforded some financial relief should you become totally and permanently disabled. In the event of a claim the proceeds will be payable to your nominated beneficiaries, or your estate, with the proceeds being distributed according to your will. You will have the option to select two types of TPD insurance: Own occupation definition will ensure you will be entitled to claim should you no longer be capable of returning to your own occupation. Any occupation definition means you must no longer be capable of returning to ‘any' occupation you are suitably qualified to undertake.  This graph illustrates the potential future scenario based on the following facts and assumptions: - George you are 41 of age with a current annual salary of $35,000. In the event of you suffering a total or permanent disability you would like to provide you and your family with an ongoing income of 80% of your current income, indexed at 3% per annum. You would like the ongoing income for you and your family to run for 19 years, assuming a long-term investment rate of 8% per annum. You indicated your current liabilities and emergency expenses would be $154,500. You estimated there is currently $267,500 available from TPD insurance and other cash reserves. WHAT WOULD HAPPEN IF YOU BECAME DISABLED? Please Note: the above scenarios are for illustration purposes only and are not fully inclusive of all circumstances. Please contact us for a full review of your Insurance needs. Back to top^
Life Insurance Life cover can help your family cope financially in the event of your death, and provides peace of mind knowing your family will be taken care of financially. It is paid as a lump sum cash payment. In the event of a claim the proceeds will be payable to your nominated beneficiaries. You also have the option to nominate your estate, if so the proceeds will be distributed according to your will. 
The above graph illustrates George Street's current position together with his estimated future requirements based on the following facts and assumptions: - George is 41, with a current annual salary of $40,000. You have expressed a desire to provide your family with an ongoing income in the event of your death of 80% of your current income, ($32,000) indexed at 3% per annum. You would like the ongoing income for your family to run for 39 years, assuming a long-term investment rate of 8% per annum. In addition you indicated your current liabilities are: - 
Total amount required including lump sum and income needs is: $526,846 IS YOUR FAMILY'S FUTURE SECURED AGAINST YOUR DEATH? Please Note: the above scenarios are for illustration purposes only and are not fully inclusive of all circumstances. Please contact us for a full review of your Insurance needs. Back to top^ |
