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In response to the many questions we routinely field about trauma cover, we would like to provide some of the basic facts.

What is It?

Trauma cover provides you with a lump sum payment if you sustain an injury or illness that is specifically covered in your policy. After suffering a traumatic illness or injury, the money can help you take care of the immediate adjustments you may have to make to your lifestyle as a result of trauma.

Why Would You Need It?

Nobody plans on having a traumatic event such as a severe injury or illness, but the sad reality is that a severe injury or illness can happen to anyone at anytime. If you decide that it’s appropriate to make plans to protect yourself from the financial consequences of such an event, trauma cover can provide you with the assurance that if something does happen, you will have resources to help with your financial well-being while you recover.

Doesn’t My Private Health Insurance Cover Trauma?

Your health insurance usually covers medical treatments, hospital stays and any extras you pay. However, when traumatic events occur, there are often expenses that aren’t covered by your health insurance. For example, you may need rehabilitation equipment or certain kinds of specialised therapies that aren’t included in your health insurance.

One of the oldest adages in the financial planning industry is “pay yourself first” by depositing a percentage of your income in a savings account. However, many of us are already so “maxed out” that we don’t have any money to put aside. The mere thought “I should save money” is more an affirmation of one’s inability to do so.

However, there are plenty of ways we can save money if we really motivate ourselves. The way to do this is to take small steps with great discipline and clarity of purpose. Too often, people trying to save money deposit large amounts into savings accounts, leaving them so strapped that they eventually withdraw it again.

Here is how to save money: take a small amount every week off of the top of your pay. This can be difficult at first and there are always temptations to spend your savings, but “slow and steady wins the race” applies here. Many people try to save by giving up something they really like and are actually surprised when they give in and stop saving money.

Ultimately, the most important question is this:

While the current super guarantee of 9.25% and its eventual 12% sound like a lot of money, most people who want a better retirement lifestyle will want to make extra contributions and use other techniques to ensure that they live the lives they want after they retire. Here are some tips for maximising your super.

Consolidate to One Account

If you have more than one super account, you may be paying unnecessary fees. Each fund charges fees and these fees can turn into a lot of money over a period of 30 years. When you pay extra fees, you are losing money twice: the fee itself and the money it could have made for you as an investment.

It is a good idea to move it all into one account. This means less paperwork, less fees and more money for your super. In addition, it is much easier to monitor the performance of one fund than multiple funds.

It’s never too early to think about your future, and Approved Financial Planners helps you do just that. One of the most important factors in your future is your superannuation fund, or “super.” Learning how to maximise it now will have a profound effect on your future lifestyle.

What Is Your Super Fund?

Your super fund is your own personal retirement fund. Your employer makes contributions to it and you are allowed to make contributions to it as well. In addition, the Government sometimes contributes to your super in special cases. Your employer is currently required by law to pay the “Super Guarantee” of 9.25% into your super. By 2019, this will have increased to 12%.

Your super will grow from year to year from accumulation. In addition, it will also grow from being invested. The laws have changed and allow individual Australians to manage and invest their own super funds. One important benefit is that super income is taxed at a lower rate than other investment income. In addition, those who contribute extra to their supers can receive co-contribution funds from the Government.

Another benefit is that you can purchase income protection or disability insurance at a lower rate through your super.

When it comes to life insurance, many Australians are misinformed due to a number of myths that pass for “wisdom” in some circles. Unfortunately, many Australians buy into these myths and leave themselves and their families woefully underinsured or not insured at all. Here are seven myths about life insurance.

“I am Too Young and Healthy to Get Life Insurance.”

Many young people overestimate themselves but no one can really predict when illnesses and accidents happen. By getting life insurance early, you can be sure that your loved ones are protected.

“The Government Provides All of the Protection I Need.”

The current maximum disability pension (for 2013-2014) is only $569.80 every fortnight for a single person and only $475.90 each for married couples. Can you sustain your current lifestyle on that payment?

“I’m Covered by Workers Compensation.”

Unfortunately, Workers Compensation only covers you if you are hurt at work. Most illnesses and accidents don’t happen at work, meaning that most Australians who rely on Workers Compensation are out of luck.

Have you ever stopped to think of what would happen if you suddenly had no income for three months? Six months? If the answer to this question disturbs you, it’s time to learn about income protection insurance. Income protection insurance pays you if you are unable to work for an extended period of time. This can help you with expenses that are crucial to keeping your home and providing for your family.

Who Needs Income Protection Cover and How Does It Work?

We recommend income protection cover for everyone whose ability to support their lifestyle is dependent upon them working to earn income. This can be someone with a small business that depends on their presence to function correctly. It is great for the self-employed and for those whose ability to work depends upon their physical health.

Income protection cover works exactly as one might think. If you are unable to work due to illness or injury, it pays you up to 75% of your current income. Income protection cover is 100% deductible. However, you must pay taxes on your income if you ever need to collect benefits.

Most policies have limits. For example, they will pay you until the age of 60 or for a set number of years. Your premiums may be stepped or level. A stepped premium means that your premium starts out lower and increases as you age. A level premium means that you pay the same amount of money each year. This ends up being more expensive in the beginning and cheaper towards the end.