Plan 2 Prosper

I have spoken with a few clients recently about their wealth protection needs. While we were rivetted in a values based exploration of what was important to them I was stopped when I began speaking about the likelihood of needing to go through underwriting.

The wonderful couple indicated that they’d heard their parents talking about underwriters previously but never been sure if it was a mysterious dark art or whether it is just someone wanting to make life difficult …. we shared a laugh and I then tried my best to explain the role of the Underwriter.

I referred to a client  guide MLC had previously provided to help me with my explanation. Upon reflection I thought it might be an appropriate thing to share with you …  Guide to Underwriting

Let me know by posting your comments if you find out something you didn’t know from the Guide to Underwriting.

Insurance for Total & Permanent Disability and Death is potentially more attractive to own through Superannuation post 30 June 2007.

• Unlimited tax free death benefits to most superannuation beneficiaries
• Full tax deductions on super contributions for self-employed

Employer-ownership needs reviewing

• Tax trap on employer-owned policies

A review of ownership of life and TPD insurance policies is recommended following the legislated reforms of Australia’s superannuation system that take effect from 1 July 2007.

On the one hand, superannuation ownership will be significantly more attractive and on the other hand employer ownership (where the employee or employee’s family is beneficiary) generally becomes less attractive, particularly in respect of larger policies.

A recent Tax Determination has extended the deductability of Salary continuance or income protection held within a superannuation fund. This determination has a number of implications and is being explored in more detail by many of the technical specialists that operate within the industry.

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The traditional role of the financial planner has been to help clients protect and increase their wealth. However, wealth creation has often taken priority over a more basic requirement for most people – the need to protect it. (more…)