Plan 2 Prosper

If you’re approaching retirement, you may often be reflective on how life is going to treat you on the health and financial fronts. This reflection is confronting and challenging enough by itself.

Probably the last thing you’d expect to cope with upon retiring from the permanent workforce 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, like many Australians you’d likely 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 own retirement funds. (more…)

Many of the conversations in my working day include posing questions and presenting situations to deliberately challenge and reposition peoples thoughts. A client who has recently made a claim for payment for cover afforded to him by his insurance policy, was definitely happy I had done so in one of our earlier reviews …

The review was a result of him receiving his annual policy statement. The client was just seeking some reassurance that he understood the policy statement and the implications of the “Good News” booklet he had received with it from the product provider. He was a bit concerned about the purpose of the policy. To help with discussing his concern, I provided him a letter which caused him to raise an eyebrow and then share a laugh. (Download – the ”Letter from a Forgotten Friend” by clicking on the link).

Not even 6 months later while we were processing the paperwork to lodge his insurance claim, he told me of a lovely quote he’d once read … it was along the lines of “I don’t take out insurance because the insurance is worth it, I take out insurance because I’m worth it”.

I think thats a pretty good attitude to have. What do you think?

Where to from here?

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

Consider for a moment the following statement attributed to the United States Court of Appeals:

“… what corporate purpose could be considered more essential than key man insurance? The business that insures its buildings, machinery and automobiles from every possible hazard can hardly be expected to excercise less care in protecting itself against the loss of two of its most vital assets – managerial skills and experience …”

It is clear that key persons may be found in all types of business, large and small, incorporated and unincorporated, capital oriented and personal service oriented, new and old. However, the need for key person insurance is not the same for all businesses that have key persons. (more…)

Once you have it, you often don’t give your insurance another thought until you need to make a claim. But as your lifestyle changes, it is easy to outgrow the insurance you have in place.

If you have made some big changes recently – like having a child, buying a house, retiring from the workforce – you may need to reassess your insurance. As your circumstances change, so does your insurance needs. Just as your circumstances change, the features and benefits available within insurances products are often updated with new offers which help furtehr protect the things you value.

Not reviewing and updating your insurance, can leave you vulnerable when you need it most. (more…)

When the budget doesn’t seem to be going as far as it used to it is human nature to try and stretch it further by reducing those expenses which aren’t providing value for money.

Insurance products when percieved purely as an expense are often the first budget item cancelled.

However, the risk of disability is great. (more…)

Did you know that every working Australian has a 1 in 3 chance of becoming disabled for more than 3 months before turning age 65. This means a 1 in 3 chance of not being able to work for a period of more than 3 months. The majority of disablements occur outside of work so Workcover/workers compensation often does not apply.

Have you had the unfortunate experience of being off work for a few months? … thankfully I haven’t, but I know a few people who have. They tell me watching the mind numbing soapies is painful enough without stressing over having the extra burden of paying the mortgage or regular expenses while they are unable to work. It is a fact … disabling sicknesses and injuries happen every day.

(more…)

Salary Sacrifice is generally accepted as a great way to accumulate wealth … I’d bet many of you haven’t considered how a wealth creation strategy can provide you with wealth protection benefits at the same time. The remainder of this post explores this concept in more detail. (more…)

Let me firstly start of by saying I am not a regular watcher of ‘Home and Away’ …. however, part of the episode I saw last night prompted me to take this action…

In the episode, there was a situation where a Grandfather had passed away recently and the next thing the surviving family knows is that the local bank manager has taken possession of the farm. It became apparant that the family were not aware of the high debts the grandfather had incurred and were quite distressed at the imminent prospect of losing access to precious belongings and family memories.

A lesson if one can be taken from such a dramatic tragedy (which unfortunately happens far too regularly in the real world) is that: “with a little planning and communication, personal tragedy need not lead to financial disaster for those you leave behind”.

(more…)

Many people look at insurance as a necessary evil – after all the best insurance policy is the one that never needs to be used. Many others don’t subscribe to insurance and instead subscribe to that misplaced aussie trait of “she’ll be right mate, it won’t happen to me”.

What this blog will attempt to do is provide information that reinforces the value of appropriate wealth protection solutions in protecting what is important for you.

Think about the title of the blog for a moment … the key message I take from this (after I take of my advisers blinkered sight) is what is important to you.

Determining “what’s important to you“ is a values based exploration that you (personally, either individually or collectively with your significant others) need to undertake before any appropriate solution can be developed. Traditionally the insurance product providers had calculators with a myriad of assumptions that could be entered to provide an “appropriate” level of cover. I believe the value based exploration combined with the challenges of your assumptions posed to you by your adviser provide a more appropriate means of constructing a wealth protection solution.

This link: Risk Presentation provides you the opportunity to access slides that I have previously used when workshopping wealth protection solutions in a group situation.

Those who participated found the group process beneficial, it provided them an opportunity to consider their own situation in the context of other peoples experiences and responses to various rhetorical questions. Some of these include:

• What if sickness or injury prevented you from earning your income?
• What if the worst should happen?
• But it won’t happen to me, will it?
• Could you use your savings, if so how would this affect your retirement plans? 

Remember personal tragedy need not spell financial disaster for you or the loved ones you leave behind.

If you would like to ask more about this or would like to participate in a facilitated workshop please contact us.

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.

For many personal risk policies, exclusions already apply for pre-existing conditions and self inflicted injuries. (Do you know what loadings and exclusions are in force on your policies? Have you stopped smoking? Are you now free from any previous medical conditions?)

A surge in Income Protection claims for car accidents as a result of driving offences (including drink driving and speeding), have resulted in the industry giving consideration to placing exclusions for criminal activity on their policies in states where these offences are punishable by jail term.

These types of exclusions could cause concern for people with a history of speeding and dangerous driving.

What does this mean for you, if you are in an accident and off work for longer than the waiting period?

• If you are charged for driving under the influence and consequently jailed, potentially no claim would be paid.
• If you are injured in a speed related accident, and charged for this offence, potentially no claim would be paid.
• If you are injured during your participation in a criminal activity, potentially no claim would be paid.

Remembering that we live in a society where we are innocent until proven ‘guilty’, it is important to keep in mind that if charges are dropped, back payment may be received. Never assume a claim will not be paid, there may be other mitigating factors for the underwriters to consider in assesment of the claim.

As at August 2007, only four of the major life companies have this exclusion. As the majority of my clients hold MLC policies, I will convey that MLC, as yet, has not embraced this exclusion  MLC Insurance … Enjoy Life.

My general recomendation to you is … revisit your insurance policy document and refresh your understanding of what your policy covers.

Should you need help in this contact us and organise a time to review your current protection strategies.