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Archive for wealth protection

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 40 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.

Techniques to Protect Your Lifestyle and Wealth

Perth financial planners are in a unique market, especially when it comes to wealth protection. Perth may have suffered the least of any Australian capital city during the Global Financial Crisis. This situation may have created a false sense of security for many in the Perth area, as though we are “immune” from financial disasters.

Unfortunately, Perth doesn’t have an exemption from unexpected trauma, illness or financial woes. Here are some ways to protect both your wealth and your lifestyle.

Income Protection Insurance

Do you have enough money set aside to pay your day to day expenses if you were suddenly unable to work for more than a few days? Income protection insurance is essential if you become unable to work due to disability or illness. The cover usually replaces 75% of your income. It is subject to tax, but the premiums are deductible. It can be obtained through your superannuation fund.

Techniques to Protect Your Lifestyle and Wealth

Total and Permanent Disablement

Total and permanent disability or TPD insurance provides for a lump sum payment in case you become totally and permanently disabled. Either you or your beneficiaries receive the payment, which is a pre-determined sum. It can also be obtained through your superannuation fund.

Life Insurance Cover

Life insurance cover is also called death cover. It provides a lump sum to your beneficiaries in the event of your death. Suicide is also covered after the policy has been in effect for 13 months. Life insurance can also be purchased through your super fund.

Trauma Cover

Trauma cover, also called “trauma insurance,” pays you a lump sum in the case of a disability or an illness that is specifically covered in the policy. The benefits are tax-free and can be collected upon proof of diagnosis.

Call Approved Financial Planners Today

Nobody wants to think the worst is ever going to happen to them, but it does happen. Wealth protection products help provide the peace of mind that you and your family are protected in case the unthinkable happens.

Call 08 6462 0888 to learn more.

How to Afford Insurance for the Long Term

We currently provide life insurance and disability insurance to many of our Perth area clients. They are two popular forms of wealth protection. Many people think they “can’t afford insurance,” but it is possible to afford it now and later, depending upon how you choose to pay your premiums.

How to Afford Insurance for the Long Term

There are two basic ways to pay for insurance: a stepped premium and a level premium. Here’s how they work.

Stepped Premium

A stepped premium starts out low and increases as you age. It is most often chosen by those who expect to make more money in the future than they do now. Ideally, younger clients on a career path find their income rising as their premiums rise. If their careers go as planned, the stepped premium can work out very well for all parties.

Level Premium

A level premium is higher at first, but tend to remain stable over the years. The premium is calculated each year, based on the age when you first took out the policy, no matter how old you are. This avoids the sharp rise that often happens with a stepped premium.

General Notes

Since insurance is meant to be a long term wealth protection tool, those who can afford the level premium now often opt for it. The earlier one starts a level premium, the more money they save on the long term. This is the opposite of a stepped premium, which is calculated every year based on age, no matter the insurance history.

Call Approved Financial Planners

At Approved Financial Planners, we have a full line of wealth protection products, including life and disability insurance. We also have trauma insurance, also referred to as critical illness insurance. We carry income protection insurance. We are located in the Perth suburb of Floreat.

We also offer a full range of financial planning services. To learn more, call 08 6462 0888 today or stop in at our office for an individual consultation.

Life Insurance for Professionals: What You Need to Know

Why so many Australians are choosing to obtain a life insurance quote as part of their wealth protection protocol.

When deciding upon wealth protection products, many business professionals are focused on obtaining cover for their assets. Often, they have to be reminded that they have neglected one important asset: themselves.

Life Insurance for Professionals: What You Need to Know

As a business professional, you have worked hard to “climb the ladder.” No matter what path you have taken, your unique skill set, motivation and talent have enabled you to create a certain level of income. That income has provided for you and/or your family, allowing you to live the lifestyle you desire.

But have you thought of what would happen if you were no longer able to work? Have you thought of what would happen if you were to suffer a tragic accident or illness, leaving your family alone and without income?

We have. It’s what insurance companies do. Here is a quick overview of three basic life insurance products.

Death Cover

Death cover provides a lump sum for your family in the case of your death. Up to $10,000 can be advanced to cover funeral expenses in the days immediately after your death.

Trauma Cover

Trauma cover pays you a lump sum if you suffer an injury or illness that is specifically covered in your plan. The money is typically used to help pay uncovered medical expenses and to help replace the income you lost.

Total and Permanent Disability (TPD)

TPD cover pays you a lump sum if you become disabled and unable to work. This helps cover debts and expenses and can help in the transitional period between becoming disabled and being able to retire.

Call Approved Financial Planners Today

At Approved Financial Planners, we can help you protect your wealth; talk to a professional consultant in Perth for more information: 08 6462 0888.