Insurance - offload the risk!

Want to bet you don’t need it - insurance, that is? - That’s exactly what you are doing when you fail to adequately insure yourself (and your family)! You take a bet that your family that you will stay in great health for the rest of your very lengthy, healthy and safe life!

So why don’t we take adequate protection with an insurance company?   Some of the reasons we hear include –

• Never thought of it;
• Can’t afford it/ it’s too expensive;
• Not yet.

What of those explanations?

Never thought of it¹
Well, now you are at least in a position to read about it. The link below has a number of further links that provide many opportunities to broaden your understanding about the benefits of the different types of insurance protection available – and without promoting any one provider for any of them!

Australians are (almost) hopelessly under-insured: it’s almost cultural! Some ‘haven’t thought of it’ because they ‘haven’t heard of it’; some are too busy leading exciting lives they haven’t turned their minds to the matter; and some others don’t understand the implications of being under-insured – and so just don’t think about it!

If any of the following situations describe aspects of your life, you should be insured – and you should review the level of insurance you ‘carry’ – so as to be able to reassure your loved ones that their future is sound:

• you have a spouse;
• you have dependants (children, parents etc);
• you have debt (mortgage, credit cards, personal loan, line of credit);
• you are employed;
• you operate a business;
• you have employees who are key to your business;
• you have business partners.

..and whilst the above list is not exhaustive, any one of those situations means you have people who are critical to your financial well-being and/ or who are dependant on you maintaining your financial well-being.

If you haven’t thought about insuring your life think about their position if you meet with an unexpected illness or accident, or worse if you die. Some Case Studies might heighten your awareness of the need for adequate protection: see links below².

Can’t afford it/ it’s too expensive
Sometimes excuses can be justified, but when your mind is numbed by the message the doctor has just delivered about an unexpected illness or disability, the next fear by most victims of such circumstances is what financial position will they (and their loved ones) be in as the disorder/ disability takes effect?

A recent survey (from which we published some extracted statistics)³ shows that most of the people who make this statement don’t have a correct perception of the likely cost of the insurance in any event – in most cases, their estimates of what cover would cost in their circumstance was considerably in excess of the market average premium applicable!

When the need arises and there are education costs to pay, medical costs/ ongoing care to pay, mortgage costs to pay – and limited financial resources available at the desperate time, the cost of the protection that would facilitate the servicing of all of these financial obligations (and normal day-to-day living costs) – through an appropriate insurance plan – suddenly seems as though it wouldn’t have been so high after all!

Not yet!
This is the really scary one folks! This is the response of the person who knows they need to have the cover; they know they should have the cover – but they choose to bet that they can get the timing right! GOOD LUCK!

The facts are that –

• insurance protection is more easily obtained for healthy applicants with no adverse medical history (i.e., no risk exclusions or premium loadings – and unlikely to be declined cover);
• illness and disease can strike with short notice – and once that happens, the whole spectre of insurability can change; and
• good habits formed early mean peace of mind for you and your loved ones over the longer term.

Don’t bet against the odds: Ensure that you are adequately insured.

¹ http://www.continuumfp.com.au/services/risk-insurance-services/;
² http://www.continuumfp.blogspot.com.au/search/label/Insurance (Who Do You Love? Case Study); http://www.continuumfp.com.au/ashleys-story/
³ http://www.continuumfp.blogspot.com.au/2011/08/insurance-numbers-crunch.html#links

Disclaimer: The information contained in this article is general in nature and does not take into account personal circumstances, financial needs or objectives. Before acting on any information, you should consider the appropriateness of it and the relevant product having regard to your objectives, financial situation and needs. In particular, you should seek the appropriate financial advice and   read the relevant Product Disclosure Statement or other offer document prior to acquiring any financial product.

Private Health Insurance; Comprehensive Motor Vehicle Insurance; Compulsory Third Party Insurance; Travel Insurance; Public Liability Insurance; you’ve got the idea…we usually insure our ‘things’: why should we take it for granted that our family’s greatest asset – ourselves and our ability to bring home an income (or to perform the invaluable household tasks), will not create distress and concern if they are lost, or even impaired? Insurance is available for most personal risk events: life insurance policies can be arranged to cover situations such as death, permanent disablement, critical illness and temporary long-term illness.

If you become ill or suffer an accident that takes you away from earning your usual income at the same rate as you currently enjoy, could you maintain your current lifestyle and continue to meet your ongoing commitments for the term of your disability?

If you or your ‘significant other’ suffers an accident or illness that is permanently disabling, could you sustain your current lifestyle and continue to meet your ongoing commitments for the term of your disability?

If you or your ‘significant other’ were to unexpectedly die earlier than at ‘normal life expectancy’, would the survivor and any financial dependants (children, aged parents etc) be able to fund an acceptable lifestyle and realise their potential?

Some serious considerations:

• The event happens today: note the actions that will need to be taken
• Accommodation/ care (in the event of accident or serious illness)
• Transport
• Food
• Emotional support
• Education
• Debts to ‘service’
• Health care
• Funeral?
• Financially what assets are available:
• How liquid are they?
• How quickly can they be accessed?
• Will they realise reasonable value?
• Whose name are they held in? (Can they be disposed of readily?)
• Who needs to be considered:
• Spouse/ ‘significant other’
• Children
• Aged parents
• Business partners?

Having read the above, provide Yes/ No answers to the following questions:-

1. did you answer No to any of the three ‘If’ questions above?
2. did you have any concerns sparked by the ‘serious considerations’ tabulated above?
3. do you have concerns as to how to rectify any shortcomings in your planning in relation to these matters?

… and if you answer Yes to any of these three questions the experienced advisers at Continuum Financial Planners are ready to conduct a review of your situation: to arrange a meeting with one of them use the Contact Us facility on our website, or call on 07 3421 3456 – we will provide a prompt response.

[This is article 6 in a series of 6 Blogs: for other articles in the series refer to the catalogue of articles showing elsewhere on this page under Risk Insurance.]

The information contained in this article is general in nature and does not take into account personal circumstances, financial needs or objectives. Before acting on any information, you should consider the appropriateness of it and the relevant product having regard to your objectives, financial situation and needs. In particular, you should seek the appropriate financial advice and read the relevant Product Disclosure Statement or other offer document prior to acquiring any financial product.

Personal Risk Management – are you adequately insured?

[This is the first of a series of Blob posts about personal risk insurance – commonly referred to as Life Insurance (although it actually covers off a number of risks potentially experienced throughout our lifetime). The series will be posted over consecutive weeks: this is post 1 of 6 items.]

What is personal risk management?

We’ll try a reality scenario as a starter:

It is 6:00 am. You hear your spouse stir from the bed and, in the usual routine, changes into some exercise gear and quietly heads out the door. In this case it is the main family income earner who has gone out. At age 49, this morning exercise routine was regular and helped keep fit for the rigours of the day’s activity at a professional office.

It is now 7:00 am and you notice that your spouse hasn’t returned. When the phone rings at 7:30 am to advise you that your spouse has been taken by Ambulance to Hospital and is being admitted to Intensive Care after suffering a major stroke, your mind clouds and you look quite concerned as you try to understand what you have just heard, process it – and then relate it to your two children (who you had been preparing to get away to school for the day).


After the concern for the well-being of your spouse has settled, early thoughts are going to be about your financial position;

• The children have a few years of school left to pay for;
• The house has a mortgage – mainly because of investments made;
• Your spouse is the primary income earner;
• Will modifications be required at home (for any continuing disability); and
• How will the ongoing household – and perhaps additional medical - costs be funded?

You have been working to a strategic financial plan and have accumulated reasonable assets, but they are still subject to borrowings – and the success of the plan requires ongoing servicing of the debt as well as further contributions.
The good news is that your financial planner has implemented his recommendation and you have all of the relevant insurances in place – and for the appropriate amount of cover.


Wealth management is a critical requirement for those of us who seek financial independence in preparation for eventual retirement. Financial planning is all about wealth management and protection – and the peace of mind that goes with those outcomes. There are a number of phases in the wealth management process – taking stock of what financial resources are available; evaluating the cashflow surplus that can contribute to further accumulation; investing wisely according to our timeframe, goals and investor risk aversion profile – and having a back-up position for the possibility that any or all of this ‘could go wrong’.


A well-constructed financial plan comprises two critical elements – wealth creation and wealth preservation (wealth protection). Wealth creation is the accumulation of financial assets (wealth) and is premised on a range of assumptions and factors: including that you will have continued good health (ability to continue to earn and generate the surplus cashflow for investment) and anticipate living to a ‘projected’ age (giving you the investment timeframe to manage).


Wealth preservation is an important strategy for those who have financial dependants – whether family or business partners – who will find the challenges of adverse circumstances emotionally challenging, without having to deal with extreme financial difficulties. It is the process of shoring up the accumulating wealth so as to not expose your ‘nest egg’ to unpredictable, untimely, insurable circumstances.


Personal risk management is transferring the risk that your health may not prevail (and/ or that you may meet an untimely demise) to another party – an insurer.  Appropriate risk insurance policies will facilitate you meeting your long-term financial and lifestyle objectives in spite of such events.


Why have personal risk insurance?
Personal risk insurance is important to relieve you and your family of the financial burdens associated with the loss of income if an event occurs such as death or permanent/temporary disablement. It provides peace of mind that you and your family are financially secure by providing an ongoing income source, debt repayment, a replacement housekeeper/nanny while your children are young, and possible funds to meet your children's future education needs.


Why should a professional assess my risk insurance needs?
Given the complex nature of risk management, professional assistance should be enlisted to ensure that the correct type and amount of insurance is established. The type and amount of risk insurance will depend upon your personal financial circumstances and objectives, lifestyle needs, number of dependants, your age and other factors particular to your own situation.


What types of insurance are available?
The types of insurance policies available include:

• Income Protection and Salary Continuance, 
• Business Expense Insurance, 
• Life (Death) insurance,
• Total (Temporary) and permanent disability (TPD), and 
• Trauma (Critical Illness) insurance. 

[Refer to our website for a description as to what each of the various types of insurance policy is meant to cover; and how each of them is useful in protecting your planning. They are linked for your convenience.]

Why participate in ongoing reviews?
As your wealth grows as a result of the implementation of your financial plan and your personal circumstances change, your need for insurance cover may decline or increase over time. Therefore, it is beneficial to periodically review your insurance cover.


Contact Us
Experienced advisers at Continuum Financial Planners can assist you determine your needs for personal risk insurance protection: please contact us for prompt attention to arranging a meeting to consider your particular situation – use the above link, or call our office on 073421 3456.


The information contained in this article is general in nature and does not take into account personal circumstances, financial needs or objectives. Before acting on any information, you should consider the appropriateness of it and the relevant product having regard to your objectives, financial situation and needs. In particular, you should seek the appropriate financial advice and read the relevant Product Disclosure Statement or other offer document prior to acquiring any financial product.

Insurance Numbers Crunch

The following article was published in the July 2011 issue of Asgard Wealth Solutions AXIS magazine - "While many Australians are focused on growing their wealth, there is much less attention given to protecting the wealth they have worked so hard to accumulate. Let's look at some of the numbers.
4%	the total Australian population with dependent children who have adequate levels of life insurance cover.
60%	families and dependent children who do not have enough insurance to cover household expenses for a year if the family breadwinner were unable to work(1).
81%	people think life insurance is too expensive, yet 61% over-estimate the cost(2).
31%	people insure their ability to earn an income with income protection insurance(3).. Yet 83% insure their car(4).
Insurance needs change throughout one's life. It's worth talking to your financial adviser about your current insurance and whether you are adequately covered." (1) IFSA/ TNS Protection Gap research 2005 (2) ING Australia's Attitudes Towards Life Insurance, December 2008 (3) TNS/ IFSA Investigating Income Protection Insurance in Australia July 2006 (4) AAMI Fact Sheet, Shopping for Car Insurance, September 2008