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Archive for Wealth Protection

The Ins and Outs of Income Protection Insurance

Income protection insurance can be an important part of your wealth protection program. At Approved Financial Planners, we offer income protection insurance from AMP Capital, which is our parent company.

Ins and Outs of Income Protection Insurance

How Does Income Protection Insurance Work?

So, what is income protection insurance? It protects your family and your lifestyle if you are unable to go to work due to injury or sickness by paying up to 75% of your current income. (1)

Income protection insurance may be appropriate for you if you want to sustain or replace your current income in the case of injury or sickness. It can also be appropriate if you want to protect and secure your and your family’s financial future. You may want income protection insurance if you are looking for a product that can be adjusted to meet your individual financial needs. (1)

The premiums on income protection insurance are tax-deductible. If you need to collect, you are allowed to use the money as you choose, with no restrictions. (2)

Think You’re “Already Covered”?

You may think you are “already covered,” but other insurance plans through your employer, private health cover and the Government may not provide the protection that income protection insurance will. Here are typical coverages that you may already have.(2)

Sick leave entitlements usually cover an employee for up to 12 days of missed work per year. It is like income protection insurance, but it only lasts 12 days. Workers’ compensation covers you if you are injured on the job but doesn’t cover sickness. Private health cover covers sickness, but only covers your medical expenses, leaving you on the hook for living expenses. Centrelink pays disability, but the payouts are means tested and are often not enough to sustain your current lifestyle. (2)

Call Approved Financial Planners Today

To learn more, call us today: 08 6462 0888.

AMP, Income Protection: “Keep your financial life on track while you’re unable to work.” https://www.amp.com.au/personal/insurance/products/insurance/income-protection
AMP Brochure, “Protect your income and your lifestyle.” https://www.amp.com.au/content/dam/amp/digitalhub/common/Documents/Insurance/Brochures/AMP-Do-I-need-income-protection-brochure.pdf

How Large is Your Emergency Buffer Fund?

We have provided financial planning for a lot of your Perth neighbours; our financial planners have more than 80 years’ combined experience. When we are getting to know your financial situation, we like to find out what your assets and liabilities are so we can devise a way to get you to where you want to be when you want to be there.

One of the questions we like to ask is, “How much money do you have set away as an emergency buffer fund?”

Emergency Buffer Fund - Financial Planners Perth

Emergency Buffer Fund?

We know that getting through life to the next paycheck is tough for a lot of people. That’s why we feel it is important to have money stashed away in case things go awry. We are not allowed to provide any individual advice on this blog. If you want individual advice, you have to come in for a consultation. Everyone’s finances are different and blanket statements aren’t always valid for everyone.

That being said, a good “rule of thumb” is that three months’ worth of income is a good “buffer” to have in case of emergency. There are many factors that can affect how much of a buffer is appropriate for you. Some of those factors include, excessive debt, one income supporting a household, self-employment, an old car for transport or living expenses that exceed 50% of your take-home pay.

Wealth Protection

One of the best ways to provide a long-term buffer is to purchase wealth protection products. Income protection insurance replaces your income if you are temporarily unable to work due to injury or illness. Total and permanent disability cover (TPD) provides you with a tax-free lump sum if you are disabled while the policy is in effect.

Life insurance cover protects your family if you die. Trauma insurance pays you a lump sum if you are diagnosed with a specific illness that is included in your policy.

Call Approved Financial Planners Today

At Approved Financial Planners, we consider your entire financial situation to provide the advice you need. To learn more or for a consult, call us today: 08 6462 0888.

Is it Time to Start Protecting Your Hard-Earned Money?

Wealth protection is an important component for those planning their financial futures. We have helped many Perth residents do just that since 2005. When helping our clients save and produce income for their retirements, we see protecting that money as equally important. So do our friends at the Financial Planning Association of Australia (FPA), who recently wrote an article called “You’ve worked hard for the money, now it’s time to protect it.”*

Start Protecting Your Hard-Earned Money

According to the FPA, statistics indicate that Australians approaching retirement can expect to spend an average of 23 years between retiring and passing on. For some, their money could run out in as little as ten years, forcing them to rely on age pension as their sole source of income.*

According to the FPA, saving for retirement should be a “fundamental financial priority,” but so should protecting that income, especially for those in their “last few years in the workforce.” Many who are in their last few years of working aren’t as healthy as they were when they were younger and may not have enough sick leave to cover illness.*

At the age of 50, the risk of cancer or heart attack increases; this makes it more difficult or expensive for many to obtain insurance. Life cover and income protection are both available through your super, but the premiums affect your super’s balance. *

Many people buying cover have to decide between long term availability and short term affordability, causing many to choose stepped premiums that cost more when reaching retirement age. Because there are so many variables when purchasing wealth protection products, the FPA advises using a financial planner.*

Call Approved Financial Planners Today

At Approved Financial Planners, we can explain your options to you fully and help you select the wealth protection products that are the best for your individual situation. To learn more, call our Perth office today: 08 6462 0888.

*Financial Planning Association of Australia, “You’ve worked hard for the money, now it’s time to protect it.” 20 August 2015.