Separating fact from fiction
- By Wayne Lennan
- •
- 30 Apr, 2019
- •
Perhaps you are wondering these questions...
Myth #1 - The insurance via my superannuation is enough
Australian research shows that almost half of industry super fund members are under insured by $100,000 for life cover and by $1,000 per month for income protection. After assessing how much life insurance you actually have through super, you'd be surprised how little there really is.
Insurance through superannuation is a tax and cost effective way to protect yourself and your family, but there are some things you should consider.
Myth #2 - Insurance premiums are expensive
Do you know you may be able to take out insurance for what you pay for your morning coffee? The average non-smoking 31 year old male, married with two children and earning $75,000 p.a. can obtain $750,000 life cover and $100,000 trauma cover for around $2.80 per day.
Myth #3 - I don't engage in paid work, so I don't need insurance
Some may think - "I'm a stay at home parent, I don't need life insurance". What most families don't realise is if the homemaker wasn't around, their family would require a lot of assistance - both emotionally and financially.
If your household was to lose its homemaker, the effects on the primary breadwinner could be devastating. When a homemaker dies or becomes disable, their partner is often left with limited options. They may have to reduce their working hours to look after the household, or employ outside help. Either option requires additional funds. Families losing stay-at-home parents may require more than $75,000 per year for child care or home help expenses.
Myth #4 - I'm young, healthy and debt free - I don't need insurance
Many people believe that insurance is for people with dependents and debts. However, if you consider that a young person's most valuable asset is their ability to earn an income, it makes sense that insurance plays an integral part in their lives. While it's true that a young, debt-free person may not need comprehensive insurance across all products, what would happen if they became ill or disabled and couldn't work? Can they depend on their parents to bear the financial burden? This is when income protection, trauma insurance and TPD insurance become options to consider.
Myth #5 - Insurance companies don't pay when the time comes
This is one of the biggest myths, with research showing life insurance companies paid out $2.3 billion claims in the calendar year 2018.
A life insurer is legally obliged to act in 'utmost good faith'. In other words, the insurance company must:
• Assess claims quickly;
• Not delay paying claims without a good reason; and
• Not refuse to pay claims without a good reason (such as a false claim)
Australian research shows that almost half of industry super fund members are under insured by $100,000 for life cover and by $1,000 per month for income protection. After assessing how much life insurance you actually have through super, you'd be surprised how little there really is.
Insurance through superannuation is a tax and cost effective way to protect yourself and your family, but there are some things you should consider.
- Is it enough
- Is the structure right?
- Will benefits be taxed?
- Is there a continuation option available?
- Does the insurance complement the intentions of your will?
- Understand the role of the trustee
- Premiums will reduce retirement benefit
Myth #2 - Insurance premiums are expensive
Do you know you may be able to take out insurance for what you pay for your morning coffee? The average non-smoking 31 year old male, married with two children and earning $75,000 p.a. can obtain $750,000 life cover and $100,000 trauma cover for around $2.80 per day.
Myth #3 - I don't engage in paid work, so I don't need insurance
Some may think - "I'm a stay at home parent, I don't need life insurance". What most families don't realise is if the homemaker wasn't around, their family would require a lot of assistance - both emotionally and financially.
If your household was to lose its homemaker, the effects on the primary breadwinner could be devastating. When a homemaker dies or becomes disable, their partner is often left with limited options. They may have to reduce their working hours to look after the household, or employ outside help. Either option requires additional funds. Families losing stay-at-home parents may require more than $75,000 per year for child care or home help expenses.
Myth #4 - I'm young, healthy and debt free - I don't need insurance
Many people believe that insurance is for people with dependents and debts. However, if you consider that a young person's most valuable asset is their ability to earn an income, it makes sense that insurance plays an integral part in their lives. While it's true that a young, debt-free person may not need comprehensive insurance across all products, what would happen if they became ill or disabled and couldn't work? Can they depend on their parents to bear the financial burden? This is when income protection, trauma insurance and TPD insurance become options to consider.
Myth #5 - Insurance companies don't pay when the time comes
This is one of the biggest myths, with research showing life insurance companies paid out $2.3 billion claims in the calendar year 2018.
A life insurer is legally obliged to act in 'utmost good faith'. In other words, the insurance company must:
• Assess claims quickly;
• Not delay paying claims without a good reason; and
• Not refuse to pay claims without a good reason (such as a false claim)
IS YOUR FAMILY PROTECTED?
Don't let myths like these get in the way of keeping your family safe. Call Wayne at Insurance for Living on 0412 494 243 to find out how you can protect your family today.