THE ability to earn an income is possibly an individual’s most valuable asset. While most people consider it good sense to insure their house, car and other possessions, many neglect their income.
In the prime of life the thought of getting seriously ill often seems distant, but many don’t consider what would happen to their assets and family if they were unable to work.
According to Tal Insurance, one in six Australians will suffer a stroke in their lifetime. Men have a one in two chance of having a heart attack over age 40, while women have a one in three chance of heart attack before age 70. One in four females and one in three males will also be diagnosed with cancer before age 75.
With this grim picture in mind, it makes sense for individuals to guard their assets and financial security in the event of serious illness; however, research has consistently shown Australians don’t take out adequate levels of insurance to protect themselves and their families.
A study commissioned by the Investment and Financial Services Association showed parents with dependents were underinsured by $1.37 trillion and that 95 per cent of families did not have adequate life insurance. The National Centre for Social and Economic Modelling found that the typical Australian family would lose more than half their income following a serious illness, injury or loss of one parent as a result of underinsurance.
The best income protection insurance is designed to help continue payments on mortgages, bills, credit cards and other debts, and provide an income while keeping investment strategies in place.
Income insurance or disability insurance is widely available at a reasonable price and can cover personal income for up to 75 per cent of earnings if injury or illness prevents receiving a normal income. Premiums vary depending on age, occupation and other factors.
Loved ones can be covered with comprehensive life insurance, so they can meet their financial obligations in the event of death; while trauma insurance is designed to ease financial pressure if one of 41 medical conditions affects the main income earner and leaves them unable to work. It will cover out of pocket medical expenses and costs associated with a major health condition, along with living costs such as groceries, school fees, mortgage repayments, electricity and rates.
Avoca Consultants can go through the many available options to find the most appropriate insurance for individual situations. Totally independent of banks and insurance companies, Avoca is a personal financial planning service specialising in risk insurances and superannuation and has been assisting families with their financial decisions since 1996.
Avoca operates a personalised one-on-one service across Perth metropolitan area. There is no fee for service and advisors will meet with potential clients at a time and place suitable to them such as their home or office.
If you aren’t protecting your assets or family with the appropriate level of income, call Avoca Consultants on 0412 119 194 or visit www.avocaconsultants.com.au.