Newsletter Articles

Life and Disablement Insurance - She’ll be right mate or will she?

Talk about our constant amazement that so many people have such an apathetic attitude towards life / income protection insurance, yet 6-Point believe they are the most important of all insurances. We therefore felt it appropriate to provide our customers with the thoughts of Australia’s most renowned financial planner, Noel Whittaker, on the topic. The following article appeared in the Sunday Mail on May 10, 2009.

“It seems these days everyone is caught up in the hype of the global economic down turn, ignoring one of the corner stone’s of financial security – insurance. This is of somewhat alarming with Australia being one of the most under insured nations in the developed world.

The situation is dire with Rice Warner Actuaries estimating that life insurance within super on average only covers 20 percent of what is truly needed. Further to this the Investment and Financial Services Association has reported that only 4 percent of families with dependent children have adequate levels of insurance.

The source of this major problem has come from the Aussie careless ‘she’ll be right’ attitude. However the reality is a stark contradiction. Recent surveys have shown that over 80% of Australians did not expect to have an accident or suffer an illness that would take them out of the workforce or die within the next 20 years. The facts on the other hand paint a different picture. Each year 1600 people die on our roads with the majority aged 26-29. Furthermore three out of four Australian will be diagnosed with a serious illness during their working life and one third of women and one quarter of men will be diagnosed with cancer at some stage in their lives, only half surviving longer than five years.

Another erroneous general belief is that insurance is too expensive, too complex and too much to think about now. Yet the cost of peace of mind is actually quite low, adequate cover does not cost the Earth.

Take for instance David. David is father of two and is the sole breadwinner for his family. He takes home $55,000 a year and has a combined family debt of $250,000. On average David’s life insurance should be $1.2 million costing him approximately $700 a year.

However life insurance alone will not cover David if he has a car accident permanently disabling him or if David suffers from a stroke and can no longer work. Total and permanent disability (TPD) insurance and trauma insurance can both be added to David’s life insurance policy for an extra premium of $800 a year. Surprisingly the cost per year is only $1,500 ($125 monthly).

If you’re unsure if your life / income insurance is adequate don’t delay in seeing a specialist to secure you and your family’s peace of mind, remember the future is promised to nobody.”

Please contact 6-Point Finance on (07) 3252 2951 to discuss further.

*Source – Sunday Mail May 10, 2009