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AM I BETTER OFF BUYING INSURANCE THROUGH MY SUPER?

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When it comes to arranging insurance it’s important to decide what types of insurance are available to you and what you’ll need for your particular life circumstances. From here you’ll need to consider whether you should keep it inside your super fund or set it up separately.

What are the benefits of insurance through super?

1. Get more for less

It can be cost effective to buy insurance through super. That doesn’t mean you won’t find cheaper cover outside your super fund. But it’s likely you’ll be better off because tax benefits mean you could end up paying less overall and group buying power—which normally comes with insurance through super—often gives you more for less.

2. Boost cashflow

In super you can pay for your insurance using before-tax money rather than dipping into your take-home pay, which can also be a tax-effective way to pay your premiums. Or, you can simply have the premiums deducted from your existing account balance. Be sure to keep an eye on your super balance though—less super may affect your lifestyle in retirement.

3. Access government help

You could make after-tax contributions to your super and use these to pay for your insurance. If you do, you may be eligible for a government co-contribution.

4. Be covered more easily

You’ll usually be granted insurance cover automatically when you buy through super. Outside of super you may have to submit an application, undergo medical examinations and wait for approval.

What are some of the downsides?

1. Tax on claims

Depending on your circumstances, you may pay tax on disability claim payments when your insurance is held through super. And certain beneficiaries may be subject to tax on death benefit claims they receive.

2. Limited beneficiaries

Payments (following death) can only be paid to superannuation dependents. If you have insurance outside of super there are generally no restrictions (unless your insurer specifies otherwise).

3. Longer timing on payments

When it comes to payments for some policies, including life insurance, total and permanent disablement and temporary salary continuance, the money will normally be paid by the insurer to the super fund first. The trustees can then pass it to you or your beneficiaries in accordance with the fund’s rules and the Superannuation Industry Supervision Act—this means payments can take longer.

4. Restricted types of cover

Cover provided through super can be more limited than a policy held outside super. For example, trauma cover is generally not available through super, but funds like those offered by AMP make it easy to link the cover you have inside and outside super.

What now?

After you’ve considered the pros and cons of holding insurance inside super, you need to determine the level of cover you need. At Tailored Lifetime Solutions we specialise in helping people work out the right amount of cover and type of insurance that best meets their individual needs. Call us on (03) 9851 0300 to arrange a meeting with one of your financial planners.

Article originally published by AMP LTD.

SUPPORT FOR CARERS

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In Australia, we rely heavily on carers to care for our aged and disabled community. According to Australian Bureau of Statistics and other sources, there are approximately 2.7 million unpaid carers providing over 1 billion hours of care. So what support is available of those carers? Here are some suggestions:

  1. Financial support is available through Centrelink either as a Carer Payment which is asset and income tested or a Carer Allowance which is not asset and income tested. These are available to carers who provide more than 20 hours per week of care;
  2. The National Respite for Carers Program is a federal government program that provides respite for carers either in the home, in day programs or in a residential facility;
  3. Carers Australia is a not for profit organisation which provides specialist services across Australia for carers. These services include advice, counselling and information. You can also contact your State based Carer organisation such as Carers Victoria for local assistance and information;
  4. There are numerous illness specific organisations which provide information, support and assistance to carers of people suffering from that illness; for example, Alzheimers Australia.

The carer needs to ensure that they take a break and take care of themselves because if they are not caring for themselves, they cannot care for others.

At Tailored Lifetime Solutions we work with other professional partners and specialists who can help with accessing care and support for you and your loved ones. Contact us on (03) 9851 0300 to arrange a meeting.

NO JOB, NO LIFE INSURANCE, NO PROBLEM?

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The importance of financial protection for stay at home parents.

There is a misconception that life insurance and income protection are only for those with real or paid jobs. But if you ask any stay at home parent, they will probably tell you their unpaid graft feels very much like ‘real work’. And the research backs this up. A study has shown that stay at home parents work longer and harder than their gainfully employed and better paid partners.

STAY AT HOME PARENTS WORK LONGER THAN AVERAGE PAID WORKER

The research conducted by TAL found that the national army of stay at home mums and dads wash, clean, cook, shop, and taxi their families around for an estimated 39.7 hours a week. This is seven hours longer than the average paid worker. To be exact, stay at home mums and dads cook for an estimated 7 hours and 30 minutes, wash and iron clothes for 4 hours and 24 minutes and clean for 8 hours and 42 minutes a week in addition to the 4 hours and 24 minutes spent walking, washing and caring the four legged family members.

Applying basic economics for a moment and using the minimum wage of $18.70 an hour, if a stay at home mum parent was paid a salary, they would earn $38,604 a year. Looking at it another way, paying someone to work the hours that a stay at home mum or dad works would cost a family a minimum of $38,604 a year. If it were possible to even find home help at minimum wage rate. This is highly unlikely in Australia’s big cities.

So if the stay at home parent falls ill, has an accident or even dies, what are the options available to help families? The good news is that families with unlimited savings or extraordinarily generous relatives will be fine. And of course some families are lucky enough to have the support of grandparents to help raise their children so they will also be OK providing Grandma and Grandpa have a spare 40 hours a week. But what if the illness is extensive or the parent, sadly, has passed away?

If the primary earner took time off work because their stay at home partner fell ill, or even died, this would probably leave families seriously out of pocket, particularly in circumstances where workers do not receive an income whilst taking time out to care for their partner and children.

HOW TO INSURE THE VALUE OF A STAY AT HOME PARENT

So what are the other options? What most people don’t realise is that they can insure the value of a stay at home parent should they become unable to do their normal duties due to accident, illness or even death. These policies, income protection and life insurance, are just as worthwhile considering for the stay at home parent. In the case of income protection, a policy will pay out a certain amount for a period of up to three months whilst mum or dad is unable to cook, clean and care. Life insurance is even simpler, providing a lump sum pay-out in the event of death.

Whilst no one likes to think about facing the trauma and upset of a major illness or death in their family, having a life insurance policy or income protection policy in place can provide real peace of mind and ensure that the whole family is looked after should something unforeseen happen to the stay at home parent.

At Tailored Lifetime Solutions, our Financial Planners specialise in helping people find the right kind of insurance to protect themselves and their family. Call us on 03 9851 0300 to arrange a meeting.

Article originally published by TAL Services Limited.

PROTECTING WHAT MATTERS MOST

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Have you ever wondered what would happen to you and your family if you became ill? Trauma insurance provides a lump sum benefit in the event of being diagnosed with a serious medical condition. It can provide financial relief and certainty at a stressful time, giving you peace of mind so you can focus on recovering. At Tailored Lifetime Solutions we specialise in helping people find the right type and amount of insurance for their individual circumstances. If you would like to discuss your personal insurance needs, call us on (03) 9851 0300 to arrange a meeting with one of our Financial Planners.