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Insurance Advice

Life insurance

Life insurance provides financial support when it’s needed most, giving your loved ones financial security and freedom to make choices about their future. For this reason, we consider Life insurance to be an essential part of a sound financial plan.

Life insurance provides a lump sum benefit (one payment) in the event of death or on the diagnosis of terminal illness. This can enable beneficiaries to pay out debts and create an ongoing income.

Total and permanent disability insurance

Total & permanent disability (TPD) insurance aims to alleviate financial pressure if you suffer a serious illness or injury that leaves you totally and permanently disabled. It takes the form of a one-off lump sum that can be used to pay off debts such as the mortgage on the family home, personal credit cards, as well fund the costs of medical expenses and rehabilitation.

TPD is generally defined as either:

  • You are unable to work in your usual (own) occupation, or
  • You are unable to work in any occupation

The level of TPD cover you need will vary according to your lifestyle, financial commitments, and foreseeable future expenses. Revolution Financial Advisers will work with you to calculate the level of cover that’s right for you by undertaking a detailed “needs analysis” based upon your unique personal circumstances.

Total and permanent disability insurance

Total & permanent disability (TPD) insurance aims to alleviate financial pressure if you suffer a serious illness or injury that leaves you totally and permanently disabled. It takes the form of a one-off lump sum that can be used to pay off debts such as the mortgage on the family home, personal credit cards, as well fund the costs of medical expenses and rehabilitation.

TPD is generally defined as either:

  • You are unable to work in your usual (own) occupation, or
  • You are unable to work in any occupation

The level of TPD cover you need will vary according to your lifestyle, financial commitments, and foreseeable future expenses. Revolution Financial Advisers will work with you to calculate the level of cover that’s right for you by undertaking a detailed “needs analysis” based upon your unique personal circumstances.

Trauma insurance

Trauma insurance (sometimes called recovery insurance or critical illness insurance) provides you with a lump sum payment if you are diagnosed with a specified medical condition or serious injury. This lump sum payment can be used for any private medical costs, debt repayments, the costs of therapy, a possible income stream or to fund the costs of making alterations to your home and car or lifestyle changes.

Traumatic events may include being diagnosed with cancer, having a heart attack or a stroke. Trauma insurance can provide you and your loved ones with financial peace of mind during times of significant emotional stress.

Income protection insurance

Income Protection provides cover for a portion of your income if you are unable to work for a period of time due to sickness or injury. Some policies also cover you if you become involuntarily unemployed such as being made redundant.

Income protection insurance differs from life insurance in that it is designed to help you meet the costs of living while you are out of work, rather than providing you with a lump sum payment if become totally and permanently disabled, or a payout to family members should you pass away.

By having income protection insurance, you can usually receive up to 75% of your salary in monthly payments, which can reduce financial stress and help you to meet your financial obligations until such time as you are able to return to the workforce. Some policies will also allow you to take out additional cover to enable a portion of the payment received to be directed to your superannuation account.

Business expense insurance

Business expense insurance is a financial back up plan for your business. It gives business owners the confidence in knowing that they have a plan in place to keep the business running if they’re unable to work due to sickness or illness. Business expense insurance generally pays a monthly sum for up to 12 months to help cover fixed business expenses so you can focus on your recovery and not your bills.
This money can help you to keep your doors open, your employees paid, and your customers happy until you can return to work. Depending on the nature of your business, your fixed business costs may include:

  • Office rent or fees plus interest on your property loan;
  • Bank fees and charges;
  • Accounting and audit fees;
  • Leases on cars, equipment or machinery;
  • Insurance and security costs;
  • Electricity, gas, water and property rates;
  • Salaries and staff superannuation (for employees who don’t generate any business revenue).

Key person insurance

Key person insurance typically pays a lump sum (one payment) on the death or total and permanent disability of a key employee covered by the policy. This money can be used to help cover:

This money can help you to keep your doors open, your employees paid, and your customers happy until you can return to work. Depending on the nature of your business, your fixed business costs may include:

  • Financial losses including any resulting increase in expenses or reduction in revenues or profits;
  • Liquidity to replace the income contribution of an individual the business relies on for cash flow;
  • Debts such as business debts to third parties or shareholders, where the ability to repay the debts may be made more difficult by the departure of the key person.

Buy/Sell insurance

This is where business owners enter into a written buy/sell agreement, setting out their respective obligations with regard to the transfer of the business equity. The choice of insurance solution for buy/sell purposes depends on the trigger events being covered. The sum insured should generally be the value of each owner’s share of the business, updated at least on a yearly basis. The insurance trigger events would usually be a death, a total and permanent disability event or possibly a trauma event.

Salary sacrificing into superannuation

With Australia’s ageing population and medical advances helping us all to live longer, it’s never been more important to plan for a secure and comfortable quality of life in retirement. The Government provides incentives to encourage Australians to save more towards funding our own retirement and one way is through a salary sacrifice arrangement.

Salary sacrifice is when you make a before-tax contribution to your super. Your employer already contributes some of your pre-tax salary or wages directly into your super fund called the “Superannuation Guarantee”. However, relying on the mandated employer contribution, typically a 9.5% super guarantee, may not be enough to achieve your desired retirement goals. By implementing a strategy like salary sacrifice you can increase your super balance and, at the same time, reduce your income tax.

The key advantage of salary sacrificing is that you’ll be taxed at a maximum rate of just 15% on these contributions and any earnings on these contributions once invested in your superannuation fund and not at your marginal tax rate (which could be as high as 49%). Salary sacrificing is a great way to reach your retirement goals faster and more effectively.

Government co-contributions

Government co-contributions is the Government providing matching contributions to your super if you earn less than $51,021 per year (before tax) and make after-tax super contributions. If you earn less than $36,021 then the maximum co-contribution is $500, based on 50c from the Government for every $1 you contribute. The co-contributions will reduce the more you earn until you reach the limit of $51,021 at which time you are no longer eligible to receive the co-contribution.

To receive the co-contribution you will need to lodge a tax return for the financial year. The Government will then work out how much you are entitled to. Assuming you are eligible, the Government will pay the co-contribution directly into your superannuation fund.

Spouse contributions

If your spouse, husband, wife, de facto or same sex-partner has a low income, working part time or not working at all, adding to their super will help you both financially. Spouse contributions involve making a contribution to a spouse’s super fund to build their retirement savings. If you help by contributing some of your own money to their super, you could be eligible to receive a tax rebate.

You can also split your employer super contributions with your spouse. Contribution splitting can only be done after the end of the financial year.

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Get in touch

Phone: 07 4632 1174

Address: 6/138 Margaret Street
Toowoomba City QLD 4350, Australia

PO Box 812, Toowoomba, 4350

Email: [email protected]

Web: revolutionfa.com.au

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