Any effective wealth creation plan involves some type of wealth protection, to ensure ones wealth is protected in the long run. Statistics show that the Australian population are more likely to insure their house or car, yet insuring their income is not so hastily applied for. Why aren’t we doing the same for the income that allows us to afford these luxuries?
Our ability to earn an income is our most valuable asset.
Assuming the retirement age of the general population is 65, many young people don’t take into consideration that they are sitting on potential earnings of around two million dollars. This is based on forty years in the workforce with an annual income of $50,000. If there is a temporary or permanent interruption in income - through illness or injury - our lifestyle is threatened and there is the risk this setback could destroy us financially.
In short, our financial commitments continue.
Income Protection insurance is one of the four pillars within a wealth protection plan. It only costs between 2-5% of your annual income to get protected. Income Protection, also known as ‘salary continuance,’ pays a monthly benefit of up to 75% of your annual income if you are unable to work due to illness or injury. This money can help with the stress that accompanies ongoing financial commitments, and assist in staying on top of debts.
Nobody plans to get sick, injured or to pass prematurely, but you can plan to provide a cash cushion if you or your family are ever faced with these events. It is all about retaining control of your financial independence, regardless of your current circumstances.
The four pillars of wealth protection
You can effectively and economically immunise your financial future against these risks using a combination of four basic types of cover:
- Income protection insurance to provide a replacement monthly income if you are temporarily sick or injured.
- Critical illness insurance to provide a lump sum of cash if you are diagnosed with one of many specified medical conditions, such as cancer, multiple sclerosis and heart attack.
- Total and permanent disability insurance to provide a lump sum of cash if you become totally disabled and are unable to work ever again.
- Life insurance to provide a lump sum of cash upon death or terminal illness.
A combination of these insurances can give you the financial resources to maintain or adjust your lifestyle and ensure that you are able to care for yourself and your family with confidence.
According to the Roy Morgan Research Insurance Report (SEP 2006) –
- 14% of consumers in Australia have Life Insurance
- 6% of consumers in Australia have Income Protection Insurance
- 5% of consumers in Australia have Total & Permanent Disability Insurance
- 2% of consumers in Australia have Critical Illness / Trauma Recover Insurance
We all have an unconditional obligation to provide for our family, and the statistics tell us we are not doing enough.
When is the best time to get insured?
With this type of insurance there are no guarantees that down the track you will be accepted for cover, so the best time to get insured is today!
For more information on Life Insurance products –
Contact Evan Kerr on (03)9791-6688
General Advice Warning
This article contains general information only. It does not take into account your objectives, financial situation or needs. Please consider the appropriateness of the information in light of your personal circumstances.