Plan 2 Prosper

It seems like there’s always time to talk about the little things in life, but discussing the big issues is never as easy. 

If you think about what’s really important to you -family, security and your way of life - you realise the need to keep them safe. 

Illness isn’t a subject anyone likes to dwell on but the unfortunate reality is you or someone close to you will be critically ill at some stage.

The financial cost of this is something you can avoid. Research from the University of Canberra’s National Centre for Social and Economic Modelling shows living expenses during a time of critical illness can be about $80,000 a year, not including the cost of medical treatment and rehabilitation.

For many people, the scenario gets worse as their illness prevents them from working and they lose their income, then their savings and investments. But it doesn’t have to be this way.

Easing the financial pain

Many people aren’t aware you can insure yourself against critical illness.

Critical Illness (CI) insurance provides a lump sum if you become critically ill so you can pay your mortgage or anything else that needs funding.  It takes away the financial pressure so you can concentrate on getting better.

But CI insurance isn’t just about financial protection, MLC policies include access to Best Doctors, a worldwide network of medical experts that consult with you and your doctor on your diagnosis and treatment.       

Elizabeth’s story

Elizabeth Gould knows the value of critical illness cover.

The mother of two children was diagnosed with breast cancer in her late thirties and had a double mastectomy.

Dealing with this illness was emotionally and physically tough for Elizabeth, but given she had CI insurance, the financial strain was significantly lessened.     

“I think one of the first times I got upset was when I received the bill for my mastectomy,” Elizabeth said.

“It was an operation that costs thousands and the Medicare component was hundreds. I was such a long way out of pocket but I had great cover. I remember thinking, I never wanted to have cancer and now I’ve paid so much money to fight it.”  

While it’s not something anyone wants to think about, Elizabeth’s grateful she took the time and initiative to plan for the unexpected.

“You don’t see cancer coming. There was no medical history in my family and I was only 38 when I was diagnosed,” she said.

“If you think there’s always time to take out insurance later on, then it’s already too late.  

“Imagine never being able to work again because of illness or accident and then ask how you would support your family. If you can, then you have enough insurance.”

Finding out how to protect your family’s future with insurance doesn’t have to be difficult or expensive.

Having the right insurance cover can be simple and cost-effective, allowing you to get on with enjoying life, because you no longer have to worry about what might happen tomorrow.

In a previous post “Protecting whats important to you …” we explored some of the value based discussions which are important for those still preferring to walk the underinsurance tightrope; again I’d implore those people to reconsider their position.

An appropriate wealth protection strategy is the foundation of any long term wealth creation strategy and financial plan. Contact us, if you would like to revisit the safety net you have in place while you walk through the tightrope that is life.

Where to from here?

If you would like to discuss the topics raised or if you would like more information, speak to your financial adviser or contact Dan Smith of Plan 2 Prosper on 07 49265 570.

• Contact us
• Get more information about an Educational Forum for you and your friends
• Register and receive regular email updates

Dan Smith is self employed and is for many families their trusted Financial Adviser based in Rockhampton. He has clients in various locations throughout Australia but predominately in Central Queensland and specifically the geographic area encompassed by the Rockhampton Regional Council.

This information is intended to only provide you with general information and, while the sources for the material are considered reliable, no responsibility is accepted for any inaccuracies, errors or omissions. Before making a decision based on this information, you must consider its appropriateness having regard to your objectives, financial situation and needs. We recommend you obtain professional financial advice specific to your circumstances.

Dan Smith and  Dancin Pty Ltd ABN 71 531 338 371 trading as Plan 2 Prosper are Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749 trading as MLC Financial Planning, an Australian Financial Services Licensee, with its Registered Office at 105 - 153 Miller St, North Sydney NSW 2060

Whether they’re highly paid professionals or full time home makers, women tend to underestimate the valuable contribution they make to the family unit. This undervaluation factor leads many women to neglect insuring their own lives and incomes. The reality is that a 30 year old woman could be protected with $700,000 life cover for as little as $1 per day, which is much less than a daily cup of coffee.

In a previous post “Protecting whats important to you …” we explored some of the value based discussions which are important for those still preferring to walk the underinsurance tightrope; again I’d implore those people to reconsider their position. (more…)

If you’re approaching retirement, you may be wondering how life is going to treat you on the health and financial fronts. That can be challenging enough in itself.

Probably the last thing you’d expect to cope with would be taking on a parental role again, but for around 22,500* Australians this is something they’re already experiencing.

If something happened to your son or daughter, you’d want to make sure your grandchildren were looked after financially, whether you became the legal guardian or played a supportive role.

A growing concern

While financial worries wouldn’t be top of mind during such family trauma, if your child hasn’t planned ahead there could be financial pressure on your retirement funds.

By investing in Life and/or Total and Permanent Disability insurance, your child can make sure the financial pressure of raising their children is eased.

This means you can focus on providing the emotional support and family structure to stabilise your grandchildren’s home life.

The cold hard facts

• An adequate standard of living in retirement requires 70-80% of pre-retirement expenditure. ^†
• Baby boomers are expected to live, on average, some seven years longer than their parents. ^‡
• 20% of baby Boomers will probably inherit very little or nothing at all. ^‡
• ‘Cancer has overtaken cardiovascular disease as the leading cause of burden.’ ^§

Start the conversation

So while talking to your grown, self-sufficient child about their financial obligations is difficult, you owe it to yourself and your grandchildren to start the conversation as early as possible.

Here are some statistics to help you with the conversation.

• To raise two children from birth to age 21 can cost $537,000^║, which would put a serious dent in your retirement nest-egg.
• Food, housing, health, education and clothing take up 55% of the total cost of raising two children for middle income families. ^║
• The costs of recreation, transport, fuel and power accumulate to just over $134,000, with food amounting to $107,800 to raise two children. ^║
• You may find you can’t get State education allowances or ‘school cards’.^¶
• If you’re a self-funded retiree (or still in the workforce) Centrelink’s means tests may result in you not being eligible for any family support payment. ^¶

At a time when individuals are increasingly expected to self-fund in retirement, Baby Boomers have become the ‘bunnies’, caught in a situation in which they are being asked to do something they do not have the capacity to do.

Source:

• The Australia Institute; Rich Boomer, Poor Boomer, 2006.
• * ABS: Family Characteristics, Australia, 2003.
• † The Australia Institute; Rich Boomer, Poor Boomer, 2006.
• ‡ NATSEM, Wealth and inheritance, 2003.
• § Australian Institute of Health and Welfare, 2007.
• ║NATSEM, Australian child costs in 2007.

Case study - David & Susan Jones

David was 15 when he started an apprenticeship at his local steel works.  Forty years later, he was still working at the same factory. 

His wife Susan has kept the family ticking along, having raised four children to become independent adults with their own families.

After a company restructure was announced, David took the opportunity to ask for a redundancy and succeeded in getting a healthy redundancy package. This, together with his superannuation and accumulated benefits, meant David and Susan were sitting pretty for an early retirement. 

Both David and Susan viewed this as a great opportunity to enjoy time with their grandchildren and to travel around Australia.

On Boxing Day of that year, David’s eldest son Rodney had a massive brain haemorrhage and passed away. 

And, because he was young and didn’t see the need for any life insurance, Rodney left his wife and three children without any means of support.

As any parent or grandparent would, David & Susan took in Erin and the kids into the family home.

The unplanned financial impact on David, Susan and their retirement plans was devastating and they were unable to do most of the things that they had hoped 40 years of work would allow them to do.

This case study is for illustrative purposes only.

“Wondering: What should I do? … “

Speak to your financial adviser about the best way to protect and manage the financial future of both you and your loved ones.  For example, you could pay for your child’s insurance if they aren’t in a position to do so themselves.

Where to from here … Maybe, it’s time we talked?

If you would like to discuss the topics raised in this post or if you would like more information, speak to your financial adviser or contact Dan Smith of Plan 2 Prosper on 07 49265 570.

• Contact us
• Get more information about an Educational Forum for you and your friends
• Register and receive regular email updates

Dan Smith is self employed and is for many families their trusted Financial Planner based in Rockhampton. He has clients in various locations throughout Australia but predominately in Central Queensland and specifically the geographic area encompassed by the Rockhampton Regional Council.

This information is intended to only provide you with general information and, while the sources for the material are considered reliable, no responsibility is accepted for any inaccuracies, errors or omissions. Before making a decision based on this information, you must consider its appropriateness having regard to your objectives, financial situation and needs. We recommend you obtain professional financial advice specific to your circumstances.

Dan Smith and  Dancin Pty Ltd ABN 71 531 338 371 trading as Plan 2 Prosper are Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749 trading as MLC Financial Planning, an Australian Financial Services Licensee, with its Registered Office at 105 - 153 Miller St, North Sydney NSW 2060

No doubt for many of you the demands on your time and funds haven’t reduced since this time last year, but as the common saying goes “if we keep on doing the same things we are likely to keep getting the same results”.

Another client recently reminded me of an article I wrote in September 2008:

http://plan2prosper.com.au/articles/2008/09/wealth-creation-and-kershaw-gardens-what-is-the-link

They said despite the strong performance of equity markets since March 2009 there is still a lot of fear and uncertainty in many people’s minds. During their regular relaxing walk through Kershaw Gardens they felt comforted while reflecting on my view that the Kershaw Gardens story is very similar to what the story of wealth creation is like - if you let it be. Within the gardens, trees that were looking sickly prior to December due to environmental conditions have picked up considerably and were full of new growth with our recent rain.

It reminded me of a Chinese Proverb also about trees:

The best time to plant a tree was 20 years ago. The 2^nd best time is now.

The best approach for anyone contemplating further wealth creation will depend on his or her own personal and financial circumstances, but the key message is that you must do something! There are many strategies that wealth creators can access if they don’t have vast sums of money or other resources available to them.

It is important to regularly review your plan (equate this to planting your own tree). This helps you take advantage of any current or future opportunities created by:

• Your changing life situation and goals
• A changed economic or legislative environment
• Emerging investment markets and new products

If you have any doubts about your ability to do this, or you would like advice and assistance to guide you through the many options, act now to get the knowledge and mentoring that you need.

Where to from here?

If you would like to discuss the topics raised or if you would like more information, speak to your financial adviser or contact Dan Smith of Plan 2 Prosper on 07 49265 570.

• Contact us
• Get more information about an Educational Forum for you and your friends
• Register and receive regular email updates

Dan Smith is self employed and is for many families their trusted Financial Planner based in Rockhampton. He has clients in various locations throughout Australia but predominately in Central Queensland and specifically the geographic area encompassed by the Rockhampton Regional Council.

This information is intended to only provide you with general information and, while the sources for the material are considered reliable, no responsibility is accepted for any inaccuracies, errors or omissions. Before making a decision based on this information, you must consider its appropriateness having regard to your objectives, financial situation and needs. We recommend you obtain professional financial advice specific to your circumstances.

Dan Smith and  Dancin Pty Ltd ABN 71 531 338 371 trading as Plan 2 Prosper are Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749 trading as MLC Financial Planning, an Australian Financial Services Licensee, with its Registered Office at 105 - 153 Miller St, North Sydney NSW 2060

Saving for the future

• Do you want to build your wealth and pay less tax?
• Are you saving for your child or grandchild’s future?
• Do you wish to retire earlier?

An investment bond can help you achieve your long-term goals tax-effectively.

Investment bonds provide you with an opportunity to build your wealth over the long term in a unique tax environment by investing in a range of investment options that are managed by professional fund managers. 

Dan Smith of Plan 2 Prosper says, “The great aspect about investment bonds is they suit a range of different investors: high income earners looking to minimise income tax or fund an early retirement, parents or grandparents wanting to save money for their children, or business owners wanting ownership flexibility and protection of their assets against the risk of bankruptcy.” (more…)

In this chapter of your life you may have taken on more responsibilities and begun to use debt to buy your first home.

Some significant events may have already taken place, so you’ll need to reappraise your insurance needs. These could be:

• Getting married or committing to a long term relationship 
• Having children or trying to grow your family 
• If you have children one member of the couple might have chosen to stay at home to help raise the children
• You have mortgage repayments to meet or are madly saving to buy a house 
• You have car repayments and running costs 
• There are credit cards to repay 
• You likely have mobile phone and internet service costs 
• There may be important social and professional clubs memberships 
• You may be saving and/or paying for your children’s education

And the list goes on.

Did you know?

According to the Australian Institute of Health and Welfare, “Australia’s Health, 2008′, an average of 2,650 Australians, aged 30-39 die each year from:

• Motor vehicle accidents,
• Cancer for females
• Heart diseases for males
• Intentional Self-harm.

The top 3 causes of disability in the same age group are:

• Injuries from road accidents,
• Self-inflicted injuries, or
• Anxiety and depression.

From a NATSEM study of Australian child costs in 2007, the total cost to raise two children from birth to age 21 is $537,000. Worryingly, 60% of those with dependent children haven’t got enough insurance to look after their loved ones for more than a year if they were to die.

What have you got to lose?

A lot … your family, home and way of life could be at serious risk if you’re underinsured or uninsured. Your partner may have to give up work to care for you if you’re sick or disabled as well as look after the children. As a result, your income could shrink to next to nothing, because you can’t afford to repay the mortgage.

IFSA Research shows that only 4% of families with dependent children have life insurance to levels in line with accepted industry norms. What have you got to lose when for a little more than the cost of a daily coffee you can protect yourself and the lifestyle you would like to lead now and in the future?

Insurance products that could suit your needs are:

• Income Protection - If you were on an annual salary of $60,000 and have another 35 years of work, you have a future lifetime earning capacity of over $3.6 Million. Isn’t that an amount worth insuring?
• Critical Illness - If you suffer a critical illness such as cancer, this pays you a lump sum so you have choices. Choices to reduce any personal debt have an extended holiday to aid your recovery or fund things such as modifying your home.
• Total and Permanent Disability - This also pays a lump sum to provide you choices in modifying your home or paying for special medical needs.
• Life Cover (possibly) - This pays your family or a beneficiary a lump sum if you die so they can pay off any of your outstanding debts or provide whomever you bequeath the proceeds choice to do things which you may have done together if still alive.

We have commented upon this topic before:

• http://plan2prosper.com.au/articles/2007/10/protecting-whats-important-to-you/
• http://plan2prosper.com.au/articles/2008/07/is-insurance-an-expense-or-an-investment/
• http://plan2prosper.com.au/articles/2006/11/life-insurance-and-the-financial-planner/
• http://plan2prosper.com.au/articles/2009/03/maximise-opportunities-from-personal-events-to-further-protect-whats-important-to-you/

And we’ll comment on it again because protecting yourself and your future earning potential is one of the most important things that can affect our families.

Money, as we all know, seems to slip through our hands in the shortest possible time, no matter how good our intentions to save. Somehow, the dream of the long awaited holiday, or new car, or paying off the mortgage, seems as far away as ever. The reason is often painfully obvious - people work hard for their money and then ignore the essential step of applying sound financial planning to those hard earned dollars.

Financial planning sounds simple - and to a large degree it is. But too many people ignore it. Most Australian households have no financial plan. A sustainable wealth protection strategy is the very foundation of any long term financial plan.

Where to from here?

• Contact us
• Get more information about an Educational Forum for you and your friends
• Register and receive regular email updates

Dan Smith is self employed and is for many families their trusted Financial Planner based in Rockhampton. He has clients in various locations throughout Australia but predominately in Central Queensland and specifically the geographic area encompassed by the Rockhampton Regional Council.

You may think you don’t need to think about insurance at your age, but I’d urge you to think again.

Consider your lifestyle and what you could lose if something were to happen to you.

• You regularly go out with friends.
• You have started a career.
• Perhaps you are paying off the education expenses of previous years investment in your future earning.
• Maybe you are running a credit card and may have some debt on that.
• Maybe you are renting your first property or even buying your first home with a mortgage.
• Maybe you are saving for a deposit on a flat or a house.
• Perhaps you are saving for travel abroad or paying off debts from previous travel you just completed.

Did you know?

According to the Australian Institute of Health and Welfare, “Australia’s Health, 2008′, an average of 1,800 Australians, aged 20-29 die each year from:

• Motor vehicle accidents,
• Accidental poisoning,
• Intentional Self-harm.

The top causes of disability in the same age group are:

• Injuries from road accidents,
• Self-inflicted injuries, or
• Anxiety and depression.

What have you got to lose?

A lot … but for a little more than the cost of a daily coffee you can protect yourself and the lifestyle you would like to lead now and in the future.

Insurance products that could suit your needs are:

• Income Protection - If you were on an annual salary of $35,000 and you spent the same amount of time in the workforce as the average male Australian, you have a lifetime earning capacity of $3 million (around 43 years based on Australian Government Productivity Commission report Jan 2007 and assuming your salary increases by 3% due to CPI and other increases)

Isn’t that an amount worth insuring?

• Critical Illness - If you suffer a critical illness such as cancer, this pays you a lump sum so you have choices. Choices to reduce any personal debt have an extended holiday to aid your recovery or fund things such as modifying your home.
• Total and Permanent Disability - This also pays a lump sum to provide you choices in modifying your home or paying for special medical needs.
• Life Cover (possibly) - This pays your family or a beneficiary a lump sum if you die so they can pay off any of your outstanding debts or provide whomever you bequeath the proceeds choice to do things which you may have done together if still alive.

We have commented upon this topic before:

http://plan2prosper.com.au/articles/2007/10/protecting-whats-important-to-you/

http://plan2prosper.com.au/articles/2008/07/is-insurance-an-expense-or-an-investment/

http://plan2prosper.com.au/articles/2006/11/life-insurance-and-the-financial-planner/

http://plan2prosper.com.au/articles/2009/03/maximise-opportunities-from-personal-events-to-further-protect-whats-important-to-you/

And we’ll comment on it again because protecting yourself and your future earning potential is one of the most important things that can affect our families.

Money, as we all know, seems to slip through our hands in the shortest possible time, no matter how good our intentions to save or to do the right thing. Somehow, the dream of the long awaited holiday, or new car, or paying off the mortgage, seems as far away as ever. The reason is often painfully obvious - people work hard for their money and then ignore the essential step of applying sound financial planning to those hard earned dollars.

Financial planning sounds simple - and to a large degree it is. But too many people ignore it. Most Australian households have no financial plan. A sustainable wealth protection strategy is the very foundation of any long term financial plan.

Where to from here?

• Contact us
• Get more information about an Educational Forum for you and your friends
• Register and receive regular email updates

Dan Smith is self employed and is for many families their trusted Financial Planner based in Rockhampton. He has clients in various locations throughout Australia but predominately in Central Queensland and specifically the geographic area encompassed by the Rockhampton Regional Council.

Taking time to talk

It seems like there’s always time to talk about the little things in life, but discussing the big issues is never as easy. 

If you think about what’s really important to you -family, security and your way of life - you realise the need to keep them safe. 

Illness isn’t a subject anyone likes to dwell on but the unfortunate reality is you or someone close to you will be critically ill at some stage.

The financial cost of this is something you can avoid. Research shows living expenses during a time of critical illness can be about $80,000 a year, not including the cost of medical treatment and rehabilitation.

For many people, the scenario gets worse as their illness prevents them from working and they lose their income, then their savings and investments. But it doesn’t have to be this way. (more…)

Have you as parents ever considered what would happen if you weren’t there to make important decisions about your childrens welfare, upbringing, lifestyle? Would your childrens guardians (assuming you have thought about this also) know what you wanted for them?

You may have provided for your children’s needs financially through an estate planning process including such solutions as life insurance and preparation of wills. Whilst I applaud you for having done that much, there is much more to your children’s welfare than just the $$$.

During a recent visit to my own solicitor I collected a brochure with information for parents about a “Guideline for the Guardians of your Children” document. This document contains a set of guidelines or instructions for those whom you as parents - or as sole single parent - appoint as guardians of your children. It ensures that those who have responsibility for the care and nurturing of your children to adulthood will know what you want for your children - if you are not there for them yourself. (more…)

Your way of life is all about enjoying the things that matter to you most – family, friends, fun and freedom. Insurance can help safeguard everyday life. But for most people the amount they have may not be enough to protect what they treasure in the event of accident, sickness or death. Lifewise shows how you can take some simple measures to create a more secure future.

Lifewise is being coordinated by the Investment and Financial Services Association (IFSA) and is being funded by special contributions from IFSA’s life insurance and reinsurance members. Research conducted by IFSA in 2005 raised the profile of underinsurance, a problem the life insurance industry has been aware of for a while.

Despite the fact that almost every working Australian has a level of life insurance cover within their super, Australia has proved to be one of the most underinsured nations in the developed world. In fact, a 2007 Swiss Re research report found Australia ranks 16th in the world for life insurance density and penetration. And a 2008 survey by the Australian Institute of Superannuation Trustees (AIST) and Industry Funds Forum (IFF) revealed that “one in two industry fund members were underinsured by $100,000 or more”.

Lifewise is an initiative of the Australian life insurance industry aimed at addressing this issue. You can access the Lifewise website through The link following allows you to access the Lifewise website: http://www.lifewise.org.au/

Through Lifewise, Australians will be able to find out about:

• the risks they face in everyday life;
• the consequences of not protecting themselves financially from these risks;
• how much life insurance cover they have; 
• how much cover they need; and 
• who they can talk to find out more.

Like always we welcome your queries to Plan2Prosper regarding these and any matters you may be considering while travelling along your life’s journey.

Where to from here?

• Contact us
• Get more information about an Educational Forum for you and your friends  
• Register and receive regular email updates