I was listening to a member of Parliament who is looking into the increasing rates of suicide, and one reason he put forward for the increase, is due to changes in Workers Compensation.
He believes because worker's are now not getting the same compensation when injured at work, this is causing financial stress and insecurity in families, and leading to an increase in the rate of suicides.
FINANCIAL STRESS IS A KNOWN CAUSE OF SUICIDE!!!
And that stress can be related to losing your job because of a sickness or accident.
Have a read of this article from the Sydney Morning Herald about thousands of injured workers facing the loss of their compensation benefits http://bit.ly/2iLcSbO
Having a good financial safety net (ie Income Protection or Trauma Insurance) could help prevent financial stress.
If you haven't got that financial security plan, give me a call and let's get a plan in place or we can review your current plan.
If you follow the news about North Korea you might think we're living under imminent threat of catastrophe.
But don't throw all your energy into building a bunker – many Australians are sitting on a potential domestic disaster that has nothing to do with communist missiles.
I'm talking about what happens if the breadwinner of the house – or one of them – is taken out of the equation. Death is the worst scenario but losing the income of a breadwinner might also occur because of an injury or an illness or even an extended period of having to care for a loved one.
I know this is not a fashionable finance topic, but it's a realistic one. It's also a contingency that households can prepare for if they acknowledge the risk early and prepare.
Here's a few tips:
· Information: start with an honest appraisal of how much your earnings are worth to the household. Calculate the monthly cost of mortgages, car loans and schools fees that are supported by your income.
· Savings: how will you cover the sudden loss of that income, even if it's temporary? The rule of thumb is to have the equivalent of three months' salary in savings. You could use an online savings account or a term deposit, a share portfolio or managed fund to do this. But your earnings will be taxed. So consider the alternative …
· Mortgage: get ahead on your home loan repayments by the equivalent of three months' salary and you build a safety net for your earnings as well as reducing the interest you pay. And it's tax-free. Just ensure your loan allows redraw or offset.
· Life insurance: if you're a breadwinner in the household, you should have a death benefit cover to at least the amount of your debts – ideally you need extra to help with all the costs of dying. Even if you're the carer, not the earner, you may need it. Who would look after the kids while the breadwinner works? How would you pay for this?
· Injury and illness: you also need total and permanent disablement (TPD) insurance for an incident that leaves you disabled; and trauma insurance for terminal diseases.
· Income protection: and for injuries that are not TPD, and illnesses that are not terminal, you need income protection insurance to keep some income rolling in if you're laid-up.
· Will: you can use a solicitor or any number of financial advisory and online services. However you do it, get your will done and save everyone a headache.
· Nominations: to ensure the right person can access your superannuation, sign the binding nomination section of your super account. Ensure you have a medical power of attorney.
And remember: if you're covered by superannuation life insurance, find out exactly what you're covered for and how much.
And talk to your family: simple things such as the combination to your safe, the whereabouts of your personal papers and access information for your bank accounts etc.
And always get advice – not only for expert insight, but to ensure you're not overpaying for protection.
Breadwinners have to do a lot of unglamorous yet important things, and providing for loved ones is the most important of all.
(Mark Bouris - Money 17th August, 2017)
Why My State Of Health Is A Giant Red Flag To Insurers
The need to get insurance early while you’re young, fit and relatively healthy!
The attached article describes how insurance companies are requiring more and more information for you to get insurance... http://www.smh.com.au/business/good-finance-advice/the-sting-of-being-priced-out-of-life-insurance-20170803-gxos9i.html
The more health problems you have, the harder it is to get insurance or the insurance company will charge you an extra premium as a loading.
If you are thinking of insurance, don’t put it off until the last minute, eg have kids, buying a house etc because before you get there you might injure your back, get diagnosed with a health issue such as high cholesterol, Diabetes or find out you have a family history of a medical condition.
All of these things will make it difficult to get insurance when you need it!
WHEN DID YOU LAST REVIEW YOUR INSURANCE POLICIES?
Situations change over time - Divorce, More Children, New Partner, Increase or Decrease of Debt, Occupation, Company Ownership, Health, Smoking Status, Sports and the list goes on.
It is important to have insurance policies in place, however it is just as important to have the right documentation to go along with it, so the right people get the right amount of money at the right time.
That’s why you have an Insurance Adviser to make sure it happens the way you want it too.
If you have been paying for insurance policies for a long time it may be a good idea to re-visit them, because circumstances could have changed.
This article from the Newcastle Morning Herald is a good example of what could go wrong... http://www.theherald.com.au/story/4790240/business-v-the-family/