Protecting Your Family’s Future with Tailored Life Insurance Advice

It’s never too early to start considering life insurance, in fact, the earlier the better. Like all home and car insurances, life insurance policies need to be in place before you need to use them – whether you are 25 or 55, it isn’t too late.

Age, gender and health are assessed when taking out a policy, so as younger people are typically in better health the costs will be less and more beneficial policy terms will be available to you. As you get older your policies will cost more.

It can be very confusing to determine how much coverage you need to maintain financial security for you and your loved ones. It is best to speak to a qualified Financial Adviser who will determine an appropriate level of cover based on your:

• Family situation
• Personal circumstances
• Employment and income
• Current assets
• Debt obligations
• Living expenses
• Cost to fund medical expenses in case of accident, injury or illness
• Important personal costs, e.g. private school fees

To ensure you select suitable life insurance policies, a comprehensive assessment of your circumstances should be undertaken by a qualified financial adviser.

An independent adviser can compare life insurance policies to determine those that would be relevant to your needs. They understand the fine print and are supported by research and legal teams who assess every product. Policies can be structured to ensure premiums remain affordable and potentially count towards your deductions.

If you have a pre-existing condition, it is important to let your financial adviser know upfront so that they can incorporate this information into their research. There are a lot of life insurance products in the Australian market, so depending on the insurer, you may still be able to get a favourable level of cover with a premium loading or health exclusions attached.

Stepped premiums may be cheaper when the policy is issued but increase as you age for the same level of cover. It pays to do the sums and consider what the total cost of the premiums will be over five years or so. This may be a good option for new business owners or others who don’t have a lot of disposable income but expect to earn more over time.

Level premiums are not affected by your age but are generally more expensive than stepped premiums in the beginning. If you want to control your costs over time and intend to hold the insurance for a long period, a level premium may be less expensive in the long term. Nevertheless, the premiums may be affected by inflation or be adjusted by the insurer.

You may also be able to have a combination of stepped and level premiums based on your circumstances and policy structure. The important thing is to review your premium structures regularly with your adviser.

When you apply for income protection, you typically choose whether to get an indemnity or agreed value policy. Your benefit is computed based on your income when you choose an indemnity policy; whereas you will receive fixed monthly payments under an agreed value policy.

When choosing between these types of income protection insurance, your income stability is the main thing to consider. If it isn’t likely to change, you could choose the indemnity option. If you freelance or have a fluctuating income, the agreed value option could provide more security.

Life, TPD and Income Protection can be held inside and/or outside your superannuation fund. Owning the cover inside your super means it is less likely to affect your cash flow as premiums are paid by your superannuation, however, there can be limitations to the cover. Insurance outside of your superannuation fund will need to be absorbed by your cash flow but can come with a greater choice of cover and other benefits.

The best-case scenario for any life insurance cover is that you will never have to make a claim. If you do, though, it is best to contact your Financial Adviser as soon as possible so they can commence liaising with your insurer on your behalf.

Here are things you usually need to provide to your insurer:

• Completed claim forms
• Medical report/s
• Identification like a passport or driver’s licence
• Evidence of financial situation like payslips or tax returns

Any claims must meet the criteria of your policy (this can be found in the policy’s product disclosure statement). Once your claim has been assessed, it will either be approved and payment released to you or declined.

Should you ever need to make a claim, a dedicated claims specialist from Coastal Advice Group will manage the whole claims process on your behalf, working hard to smooth the way and reduce the stress on you and your loved ones.

Many people think that Workers’ Compensation and Income Protection are the same, but this is not the case.

The key difference is that income protection covers you for injuries and illnesses both inside and outside of work while the former only covers you for direct work-related conditions.

Accidents happen every day and when you consider that 75% of accidents occur outside of work, income protection seems like the safer and more beneficial option.