Wealth Protection

Insurance towards retirement

Why it’s important to think about insurance ahead of retirement

By | Financial advice, Retirement, Wealth Protection | No Comments

If retirement’s coming up on your horizon, you’ll be keen to make sure your plans stay on track. It makes sense to concentrate on things you can control, such as insurance.

Too-high premiums can chew away at the foundations of your savings, at a time when they’re more important than ever. Under-insure and one day your floor may collapse, undone by events you can’t foresee.

Cover for a changing life

As you get close to retirement, you may want to make sure you’re holding the right insurance for the lifestyle you want. Here’s a simple checklist that may help:

  • Ask yourself how much money your family would have if you were to pass away or become disabled;
  • Compare that with how much money your family might need in the same situation, including how they’d manage paying for day-to-day costs like child-care and mortgages;
  • The difference between the two can help you work out how much insurance you may need.

Many of us take out insurance and are done with it – it’s enough to know we have the proverbial rainy day covered off. However, with economic clouds gathering, now’s a good time to review what you’ve already got and assess if it’s still right for you and your needs.

So, dig out your existing insurance agreements, taking special note of when they’re due to expire and your continued eligibility for the policies they hold.

An important area for many Australians is insurance held inside superannuation.

Insurance inside super

Insurance inside super can help us out when we really need it. Like any type of insurance, it works best when you’ve got the right level of protection for your situation. As you head towards retirement and your life changes, so might your priorities.

As well as life insurance, you might have total and permanent disablement (TPD) inside super. TPD cover may provide you with a lump-sum payment if you suffer a disability that prevents you from ever working again.

TPD could help you pay for ongoing medical expenses, alterations to your home to make day-to-day life easier and help provide future financial stability.

Total salary continuance, also known as income protection, is designed to pay a monthly benefit of up to 75% of your pre-disability regular income if you’re unable to work due to injury or illness.

Typically, within super, income protection provides you with cover either for a two-year or five-year period or until you turn 65, depending on the terms in your employer plan.

What to look out for

There are pros and cons of insurance within super. Things to think about if you’re approaching retirement include:

  • Cover through super may end when you reach a certain age (usually 65 or 70). That’s generally different to cover that’s outside a super account;
  • Taxes may be applied to TPD benefits depending on your age;
  • Claim payments may take longer, as the money is normally paid by the insurer to the trustee of the super fund before it’s paid to you or your dependants.

Don’t double up and stay flexible

As part of your review, it’s also a good idea to check insurance you hold inside super against other policies you might have outside super.

Then compare your cover, check whether you have any insurance double ups – if you have more than one super account with the same type of insurance, you may be paying for more insurance than you need.

As well as comparing the level of cover you get, consider any exclusions, such as the treatment of any pre-existing medical conditions, and waiting periods. Remember that if you do cancel your insurance, you might lose access to features and benefits and may not be able to sign back up at the same rate.

It’s also important to disclose your situation to your insurer honestly. Otherwise, the insurer may be entitled to refuse your claim.

Any change calls for flexible thinking, whatever age you are. The lead up to retirement is a great time to review your insurance and adapt to changing circumstances.

Source: AMP

What's your most important asset

What’s your most important asset?

By | Financial advice, Wealth Protection | No Comments

When it comes to insurance, many people adopt a ‘she’ll be right’ attitude, but looking at the statistics, there’s more chance of something going wrong than you might think.

Research has found that one in five families will be impacted by death, a serious accident or illness that leaves a parent unable to work, but 95% of families don’t have adequate levels of insurance to cover this situation.

What types of cover are available?

Insuring yourself and your income can allow you to maintain your lifestyle and living arrangements, and give you comfort in knowing you can still meet your financial commitments—things like your home loan, rent, card repayments, bills, kids’ education fees, and treatment and rehabilitation costs should you need it.

You can buy different forms of personal insurance through your adviser. Here’s a rundown of the four main types of cover available:

  • Life insurance pays a lump sum on your death or the diagnosis of a terminal illness;
  • Trauma insurance pays a lump sum on the diagnosis or occurrence of a specific illness;
  • Income protection typically provides a replacement income of up to 75% of your regular income if you’re unable to work due to illness or injury;
  • Total and permanent disability (TPD) pays a lump sum if you become disabled and are unable to ever work again.

How much is enough?

It’s important to choose the right type of insurance for your situation, which will be impacted by your personal circumstances, such as whether you have a partner or children, and the level of your debts.

It’s also important to understand how much insurance you need so you are not underinsured – nor paying for unnecessary cover.

What else do I need to consider?

Some people believe that if they are young or healthy they don’t need life insurance. However, circumstances can change quickly, and it generally costs more to buy insurance when you’re older, so securing cover when you’re young could be a good idea.

Another common belief is that if you get sick or injured the government will pick up the bill. And while it’s true that workers’ compensation and benefit payments may apply in some cases, it’s unlikely any payments will fully replace the income lost, or cover all of your ongoing financial obligations.

If you need more information, speak to us today.

6 misconceptions about life insurance

By | Financial advice, Wealth Protection | No Comments

The probability of you developing a serious illness or getting involved in an accident so severe you’re unable to work, may seem highly unlikely…..until something happens.

It’s often small events that remind us we’re not completely in control of these possibilities, which is exactly what life insurance is for.

Unfortunately, there are a lot of misconceptions about life insurance which can lead to missed opportunities to protect ourselves and our dependants.

In this article, we’ll set the record straight for six of them.

1 – You don’t need insurance if you don’t have dependants

If you don’t have anyone financially depending on you, you may be under the impression that you don’t need life insurance, but it’s not always the case.  There are other financial commitments which could make it worth considering.

For example, if you fall sick or become injured for an extended period of time and are unable to work, you’ll still need to meet day-to-day expenses.  Having Income Protection may therefore help you in covering a portion of your income.

2 – Life insurance is set-and-forget

Unfortunately, it’s not enough to stuff your life insurance policy in a drawer and forget about it.

Adjusting your policy is extremely important as your needs change.  If you decide to reduce your level of cover though, make sure you’re not leaving yourself exposed.  For instance, even if your children are no longer financially dependent on you, your spouse may still need financial support if you were to pass away.  Reducing the total amount your cover could also place you at risk if it’s not keeping up with inflation.

Speaking to a financial adviser can help you determine how much cover you actually need, if you are considering reviewing your life insurance.

3 – Naming your child as a beneficiary is a good option

If you name your child or grandchild as your primary life insurance beneficiary, complications can arise if you pass away before they turn 18.

In most circumstances, if your child is under the age of 18, the courts will appoint a guardian or custodian to look after how the money is managed.  Restrictions, legal fees and other costs may take a significant amount of your life insurance proceeds, at your child’s expense.

A solution you could consider is to set up a trust on behalf of your dependants, which you can name as the recipient of your life insurance proceeds.  This can provide financial security for those who can’t or don’t want to handle large sums of money or other assets.

4 – You don’t need insurance because you’ve paid off your debts

While your need for life insurance may reduce once your kids have grown up and you’ve paid off your debt, it’s still worth considering it to cover things like everyday living expenses, any outstanding debts, medical and funeral costs.

Rather than removing it completely, you may therefore need to simply reduce it, depending on your needs.

5 – You’ve got life insurance covered through super

Many super funds offer life insurance cover which is often cheaper than being insured outside of super.  Your premiums are also deducted directly from your super rather than a bank account and there are some tax benefits too.

But it is possible that the amount of life insurance cover you have available through super, may not be sufficient for your needs.

So if you’re unsure about it, consider finding out exactly what you could receive if you were to make a claim and compare this to what you actually need.  Revolution Financial Advisers can help you with this.

6 – You only need to insure yourself if you’re the breadwinner

If a dependant, such your spouse or child falls sick, you want to ensure that you’re able to care for them.

Child cover for example, can provide a lump sum if your child suffers a serious illness or injury (refer to the product PDS to see if this is an option and what it covers).  The money may also help you take time off work to focus on what matters most.

Of course, there is an added expense to insuring your family members under your policy, so consider whether it is worthwhile.

Source: BT,

Myths about Life Insurance

5 Common myths about life insurance

By | Financial advice, Wealth Protection | No Comments

Most of us like to think that insurance is a set and forget proposition that we pay for without too much consideration. However, no one can predict the future. Illness or injury can strike at any time with potentially devastating consequences. Australian Bureau of Statistics data shows that medical illnesses are the leading causes of deaths in Australia1. Topping the list are several types of cancer, Ischemic heart disease, stroke, Alzheimer’s disease and dementia. The health risks are clear yet many Australians are manifestly ill-prepared for these life events.

According to Rice Warner’s ‘Underinsurance in Australia’ report2, an average Australian couple around 40 years of age with children would require life insurance cover of approximately 10 times their annual earnings to repay debt and maintain their current living standards. However, very few Australians have anywhere close to this level of insurance cover.

It’s common for people to have an “it won’t happen to me” mentality, but unfortunately the facts speak for themselves. Taking some time to understand more about life insurance is worth its weight in gold as it could protect the financial stability of those you care for if you can no longer work or pass away.

Here we look at some common myths about life insurance.

Myth One: ‘I’m young and healthy. I don’t need life insurance.’

It’s easy to think you don’t need life insurance when you’re young, fit and healthy, but life has a funny way of ‘just happening,’ and if you are about to experience a significant life event such as getting married, having a baby, or buying your first home, you need to consider what could happen if the unexpected were to occur. For instance; if you were left without an income, how would you and your dependents cope financially?

It’s also important to consider what your health may be like in the future. Although you may be young and healthy now, unfortunately deteriorating health is a natural part of life. It’s a good idea to consider taking out life insurance early on in life, when you’re less likely to have any pre-existing medical conditions, as these could make you ineligible for life insurance cover or attract higher premiums when you’re older.

Myth Two: ‘I’m single and I don’t have any dependents. I don’t need life insurance.’

According to the Australian Institute of Family Studies3, the number of Australians living alone is as high as it has ever been with one in four people living in a single person household and that’s been the case for more than a decade now. While many of us are happy living alone, many of us also have financial responsibilities that aren’t linked to having a partner or a child.

Myth Three: ‘Life insurance is only worth it if you pass away.’

One main objective of life insurance is to provide financial security for your loved ones should you pass away. However, other personal insurances can also provide protection should you become critically ill, injured in an accident, or permanently disabled. Should this occur and you are no longer able to work, insurance can help you to pay for out-of-pocket expenses such as the cost of medical treatment and other household bills.


Myth Four: ‘My superannuation fund includes life insurance cover. I don’t need any more.’

Many super funds offer some form of life insurance for members but it’s often just a very basic level of cover and may not take into account your individual circumstances nor the amount of cover you would really need to maintain your standard of living if you could no longer work. This is where professional advice can help. Your financial adviser can tailor an insurance plan that’s designed specifically for you. This includes a review of any existing insurance policies you may have, an analysis of your financial obligations, and the level of financial support you want for your dependents; both now and into the future.

Myth Five: ‘I have private health cover. I don’t need life insurance.’

 There’s no denying that private health cover can be immensely beneficial if you require urgent or costly medical treatment. However, in many cases it won’t provide cover for ongoing post-operative costs such as any rehabilitation, or those financial obligations that continue while you’re unable to work, such as household bills and your mortgage repayments. Personal insurance can help by covering these additional expenses, and help protect your family’s financial situation should you be unable to return to work.

Reviewing your insurance arrangements with your financial adviser makes good sense. Even if it simply confirms that your existing insurance cover is fine. To find out more, please contact Revolution Financial Advisers.


1 Australian Bureau of Statistics, 2009, Causes of death, released May 2011

2 Rice Warner ‘Underinsurance in Australia’ report (July 2014)

3 Australian Family Trends No. 6. Australian Institute of Family Studies, March 2015.

buying insurance through your super? Contact Revolution Financial Advisers Toowoomba for advice.

Are you better off buying insurance through your super?

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When it comes to arranging insurance it’s important to decide what types of insurance are available to you and what you’ll need for your particular life circumstances. From here you’ll need to consider whether you should keep it inside your super fund or set it up separately.

What are the benefits of insurance through super?

1.  Get more for less

It can be cost effective to buy insurance through super. That doesn’t mean you won’t find cheaper cover outside your super fund. However, it’s likely you’ll be better off because tax benefits mean you could end up paying less overall and group buying power – which normally comes with insurance through super – often gives you more for less.

2.  Boost cash flow

In super you can pay for your insurance using before-tax money rather than dipping into your take-home pay, which can also be a tax-effective way to pay your premiums. Or, you can simply have the premiums deducted from your existing account balance. Be sure to keep an eye on your super balance though – less super may affect your lifestyle in retirement.

3.  Access government help

You could make after-tax contributions to your super and use these to pay for your insurance. A payment into your super from your after-tax income is called a non-concessional contribution. This money is not taxed as you have already paid tax on it at your normal rate. There is a $100,000 limit per year, for the current year, on the amount of after-tax contributions you can make. If you do make after-tax contributions to your super, you may be eligible for a government co-contribution.

4.  Be covered more easily

You’ll usually be granted insurance cover automatically when you buy through super. Outside of super you may have to submit an application, undergo medical examinations and wait for approval.

What are some of the downsides?

1.  Tax on claims

Depending on your circumstances, you may pay tax on disability claim payments when your insurance is held through super. Certain beneficiaries may be subject to tax on death benefit claims they receive. A beneficiary is a person who receives all or part of the deceased estate. If a will exists, it usually sets out how the deceased estate and income should be dealt with.

2.  Limited beneficiaries

Payments (following death) can only be paid to superannuation dependants. If you have insurance outside of super there are generally no restrictions (unless your insurer specifies otherwise).

3.  Longer timing on payments

When it comes to payments for some policies, including life insurance, total and permanent disablement and temporary salary continuance, the money will normally be paid by the insurer to the super fund first. The trustees can then pass it to you or your beneficiaries in accordance with the fund’s rules and the Superannuation Industry Supervision Act – this means payments can take longer.

4.  Restricted types of cover

Cover provided through super can be more limited than a policy held outside super. For example, trauma cover is generally not available through super.

What now?

After you’ve considered the pros and cons of holding insurance inside super, you will need to determine the level of cover you need. A financial adviser can help you to work out how much may be right for you. Regardless of how you choose to buy your cover, be sure you have the right type and amount for your needs.

If you would like to discuss your insurance needs, please contact Revolution Financial Advisers to make an appointment.

Source: Capstone, AMP and Australian Federal Government.

Protecting yourself against risk

Protecting yourself against risk: Counting the cost of a curve ball

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Curve balls.  They’re unexpected, often deceptive and it’s impossible to predict their trajectory. That’s why they’re so devastating – in sport and in life. There’s some interesting data now available about the kind of curve balls that can impact your life, your finances and your retirement.

The headline figure is this: one in three Australians could be disabled for more than three months before turning 65. If you combine this with another startling fact – that 60% of Australian families with dependents will run out of money if the main breadwinner can no longer bring in an income – you can see the problem. Curve balls are pretty common, but so few people are prepared for them and with mortgages to pay, school fees to fund and your family’s future to think about, it may be time to think about protecting the things you love from the unexpected.

What would you do if the main breadwinner in your household could no longer bring in an income? Do you have a Plan B? Most people don’t.  That’s where insurance comes in.

What kind of Plan B do you need?

The last thing you need to worry about when you’re dealing with a curve ball is your finances – how you’ll keep the lights on and the kids fed. That’s where insurance comes into its own. It’s a well-known saying that you only realise the value of insurance when you need it – and you don’t have it.  But there’s also a common misconception that insurance is a one-size-fits all drain on your finances. That’s defintely not the case.

There are different types of insurance that you can consider depending on your stage of life, industry and goals for the future. You may not need all of them.

Here are the four main types of insurance and the key personal protection needs they meet.

Income protection

Income protection can provide a monthly payment of up to 75% of your income if you’re temporarily unable to work due to illness or injury. This money could be used to meet your ongoing living expenses and financial commitments while you recover.

Critical illness or trauma cover

Critical illness cover can pay a lump sum if you suffer or contract a critical condition specified in the policy (eg cancer, a heart attack or a stroke). This money could be used to:

  • cover medical and other expenses such as rehabilitation, childcare and housekeeping; and
  • clear some or all of your debts.

Total and Permanent Disability

Total and Permanent Disability insurance can provide a lump sum payment if you suffer a total and permanent disability and are unable to work again. This money could be used to:

  • clear your debts;
  • cover medical and rehabilitation expenses; and
  • enable your family to meet their ongoing living expenses and maintain their lifestyle.

Life insurance

Life insurance can provide a lump sum payment in the event of your death. This money could be used to:

  • clear your debts;
  • enable your family to meet their ongoing living expenses and maintain their lifestyle;
  • cover other expenses such as education, childcare and housekeeping; and
  • treat your beneficiaries equitably.

Seek advice

As we move through our lives, our insurance needs often change, so it makes sense to speak to a financial adviser to find the best option for you and your family. Revolution Financial Advisers can work with you to understand your wealth and lifestyle goals and put a plan in place to help you reach them.

Source: MLC.

Wealth protection

Life insurance – too good to be true?

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The recent surge of life insurance advertisements has attracted much interest and debate and as with everything in life, if something sounds too good to be true, it usually is.

Everywhere you look, there are offers of affordable and easy life insurance. Simply call this number / click here and you can be approved in minutes. No medicals, minimal paperwork and near instant approval. Anything wrong with this picture? You bet.

While people serious about their life insurance requirements seek qualified advice from Financial Advisers, it is easy to get caught up in the hype of a perceived deal and be caught out. Here’s why it pays to heed instincts when considering life insurance needs:

What is insured?

Life Insurance is a term familiar to many people; however you should be aware – like most things, all things are not equal. There can be large variations in what policies cover. Think about the term “car” – an instantly recognisable word; however, the differences between a Kia and Porsche are many and varied.

What is low cost?

Make sure you compare apples with apples. How can you decipher if a life insurance solution is cheap, if you are analysing completely different policies. You should exercise caution when evaluating premiums as you need to keep in mind that policies offering no medicals generally mean an increased premium cost in lieu of not assessing the health status of those being insured.

Also be wary of weekly or daily figures; this can be used as a distraction from the annual premium.

Is it personal?

A key component integral to life insurance is your age, family make-up including dependants, lifestyle, financial obligations, future aspirations etc – as this provides a snapshot of your situation and hence how much cover is required. We all have different circumstances, so you need to exercise caution when an advertisement offers a flat amount – i.e. $500,000, as this is certainly not based on your own situation.

The true value of advice

We strongly believe in doing things properly and that there is no substitute for professional advice. If you think about what is at stake, it is your family’s financial future and welfare; is that worth risking on a non-personalised life insurance solution?

Opting for a life insurance provider that is generically positioned through the media does not take into account your own circumstances and is potentially asking for trouble. It may mean strict and convoluted definitions (i.e. very specific coverage of events), inadequate levels of cover, broad exclusions and or high costs.

If anyone in your social circle is contemplating life insurance options or would like to review their current cover, it’s wise to speak to a qualified Financial Adviser who will undertake a detailed analysis of your situation and provide advice based on your needs. Contact Revolution Financial Advisers for more information.

Investment in insurance

Reviewing your insurance strategy is a solid investment

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We’re all interested in reviewing the current status of our wealth creation plan to see how our investments are performing. Unfortunately however, reviewing your insurance strategy is an often forgotten activity, as many of us adopt a ‘set and forget’ approach.

Do I still need my insurance?

If you’ve ever been involved in a car accident, had a flight cancelled, become seriously ill or had an injury that has kept you out of action for any length of time, you’ll know how worrying these incidents can be. If you have insurance, the cost of repairs, medical treatments, travel changes or recovery treatment can be softened.

Insurance provides the money you need when things go wrong, and we all know that sometimes, they do.

When should I review my cover?

You should review your insurance strategy whenever there is a change in your personal or business circumstances. Changes in any of the following areas should prompt you to review your cover as they can impact the type and amount of insurance cover you need:

  • income
  • assets
  • debt levels
  • dependants
  • relationship status (for example marriage, divorce or a new partner)
  • occupation or employment status (for example if you become self-employed or employee)
  • health (improvements or change in health of you or your partner)

What if nothing has really changed?

You should still review your insurance strategy every year, even if nothing in your personal or business circumstances has changed. Intense competition in the risk insurance marketplace means that insurance providers are always looking for the ‘edge’ with their products, particularly to ensure they remain in the highest rated products.

This can often result in additional benefits, better policy definitions and the introduction of new additional options which can be of value to you if you need to make a claim. While many insurers will automatically ‘pass back’ improvements in their policy definitions, this shouldn’t be assumed.

Where can I go for help?

It’s best to speak with us, your financial adviser, as we specialise in helping you understand the details of any policies you have, or that you are applying for.

Why do my premiums go up?

A question that is sometimes asked is ‘Do events such as the GFC impacted on my premiums? I have heard that due to the poor investment returns life insurance companies are facing, they have to pass this on to me in higher premiums.’

According to TAL, the answer is generally no. Most life insurance companies invest the premiums received into the short term money market and not into shares, in respect of backing their insurance liabilities. In broad terms, insurers are trying to match their investment strategy to suit the liabilities they are exposed to.

Whilst short-term interest rates have come down, as the Australian Government and those around the world have tried to stimulate economic activity through cheaper credit, this would only have a marginal impact on term premium rates. An exception to this is long term income protection, where falling interest rates have their biggest impact, due to the long term nature of the liability potentially stretching many years into the future.

Does inflation impact your premium rates? Yes, although only marginally so. As with any other business, rising costs faced by life insurers end up being passed on to customers. However, the component of your premium which is used for the running business expenses of the insurer is often only a fairly small component, and with inflation at approximately 2.5 per cent per annum), this is not a significant factor.

For further information, please contact Revolution Financial Advisers.