Key Findings - Insurance Literary Report

Thursday, October 01, 2015


Following on from our post 9 September, where we looked at some statistics around Aussies trusting their insurance needs to their superfunds.

We felt it necessary to highlight a number of other issues to have come out of the Insurance Literary Report.

 Key findings include:

• Many Australians (17 per cent) do not know if they have trauma cover.

Almost 40 per cent did not know that being diagnosed with a terminal illness is a trigger for a life insurance payout.

• Less than 10 per cent said they ‘went with their gut feeling’ when choosing how much cover to purchase.

• Over 40 per cent said they weren’t sure if they could buy travel insurance through their superannuation, with 8 per cent believing they could buy this type of insurance through their super.

• Nearly 57 per cent didn’t know if term life insurance purchased via their superannuation fund was tax deductible, or if term life insurance bought outside of superannuation is tax deductible.


Point 2 was very interesting.  Please contact us should you wish to discuss any of the findings highlighted.




Is your family lifestyle at risk?

Wednesday, September 16, 2015




Protect your most valuable asset

With escalating property prices continuing to make headline news, it’s no surprise that many people consider the family home as their most valuable asset. It’s certainly one they fully insure. But, in most cases, your home is not your most valuable asset. It’s your ability to earn an income.

Over your lifetime, your earning capacity could amount to millions of dollars, putting the value of your family home well and truly in the shade.


The math on annual income

For instance, let’s imagine you’re currently aged 40 and are married with two kids, earning $150,000 a year as a logistics manager. Now, let’s say that you plan to work until you’re at least 65 years of age, and you can expect annual increases of a modest two per cent each year.

Over the next 25 years, your accumulated earnings will amount to more than $4.8 million to cover you and your family’s lifestyle and living expenses – everything from the mortgage, to family holidays, your car, school fees, and more. 

Yet only one in three Australians has income protection insurance, putting many families at risk.


Peace of mind

While injury or illness may stop your income, it certainly won’t stop the bills. Indeed, Australian cities are among the most expensive in the world. This high cost of living, coupled with the fact that Australians have a one in three chance of being disabled for three months or more before the age of 65 provide compelling reasons to insure your income.



These days, you can tailor income protection insurance to suit your circumstances and budget. If cash flow is a struggle and finances are tight, you might prefer to get income protection insurance through your super fund.  Being insured through super is generally an easy and more cost-effective option although the amount of cover available is limited compared to holding income protection separately.

So if you’re an established professional with a high income, or if you want to maximise your retirement savings rather than dip into them for insurance  premiums, holding income protection insurance outside your super will probably be more beneficial.  It’s also good to know that, unlike other types of personal insurance, income protection premiums are tax deductible.


Two other factors influence the cost of income protection:

Waiting period
Policies typically come with a waiting period – and the shorter this is, the more expensive the premiums will be. So if you have enough savings to manage expenses for three or six months, it’s worth extending this waiting period.

Length of benefit period
You can cover your lost salary for a specific length. The greater your benefit period the more expensive your premiums will be.

To find the most appropriate way to protect your most valuable asset, it’s a good idea to talk with your financial advisor.


Aussies Trusting Insurance Needs To Super Funds

Wednesday, September 09, 2015

One in five Australians with life insurance inside super say they have stuck with their default cover option because they trust their super fund or employer to know the correct level of cover for them.

The Life Insurance Literacy Gap report found that the majority of Australians who hold life insurance (52.2%) purchased the cover through their super fund with no assistance from a financial adviser. 

When asked why they chose to stick with the default level of insurance coverage, 24.2% of respondents said it “looked sufficient without needing to do any calculations”, 21.1% said they hadn’t gotten around to reviewing their cover, and 12.9% said they trusted that their super fund had chosen the correct level of insurance cover for them.

Other key findings from the survey include:

  • 42.2% of respondents believe that buying life insurance through super is the cheapest way to purchase cover, with or without assistance from an adviser
  • 23.3% of Australians said that if they were to purchase a new life insurance policy or update their existing cover, they would seek advice from a financial planner
  • 27.6% of Australians were unsure about the accessibility of life insurance through super

Too many Australians still believe that financial planners are only for the wealthy, yet nothing could be further from the truth.

We know from the Investment Trends research that regardless of how much money people have, they feel happier and more in control of their financial future if they take the simple step of consulting a financial planner. 

Please contact us should you have any issues or queries.







Trauma Insurance and the Big 4

Friday, July 10, 2015



 The very first successful human to human heart transplant was performed in 1967 by a team of specialists including Heart Surgeon Dr Marius Barnard. Not only was Dr Barnard part of the team that changed medical history, but he’s also responsible for the introduction of Trauma insurance in Australia.

Dr Barnard noticed that improvements in medical care meant that many more patients were now surviving and recovering fully from their medical conditions but in doing so were suffering from financial stress and the financial burden associated with the cost of treatment and recovery, not to mention time out of work.

So in 1983 Dr Barnard launched an insurance product called “dread disease insurance” which covered four major medical conditions being heart attack, stroke, cancer and coronary artery bypass surgery, also known in the industry as the “Big Four” medical events. 

Whilst the trauma insurance product has evolved significantly since 1983, the Big Four :

  • heart attack
  • stroke
  • cancer
  • coronary bypass surgery

Statistics show that more than $621 million was paid out in Trauma claims in Australia in 2013 *. This is likely to increase with the Cancer Council of Australia forecasting 149,990 new cases of cancer to be diagnosed in 2020, up from just 47,388 cases diagnosed in 1982. 

Calculating the exact level of cover needed will be different for everyone. A trauma policy can provide funds to help prepare the unexpected. It can assist by providing funding to pursue top-level medical treatment, travel to seek medical assistance or allow a partner or spouse to take some time off work to provide care. It could also cover medical and treatment costs and out of pocket medical expenses, replace income in the event that you can’t work and go towards reducing or repaying debt.

To work out an appropriate sum insured for Trauma cover, typically a needs analysis will be required to take into consideration your own personal and financial requirements.