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RISK PROTECTION

Minimising the financial impact of an unexpected event.
For most of us, the ability to earn an income is our most fundamental asset. For this reason, whether you have dependents, regular financial commitments, or simply wish to retain your savings and continue building wealth, the right level of insurance cover is vitally important.

Insurance is the most effective form of risk mitigation for minimising or avoiding the financial impacts of an unexpected accident, debilitating illness or premature death. It can replace a portion of an income when someone is unable work, help cover the costs of medical and rehabilitation expenses, or provide beneficiaries with a lump sum benefit, giving them the best opportunity to rebuild their lives and maintain their financial security.

Just as importantly, knowing that you have effective and adequate risk protection in place, provides invaluable ongoing peace-of-mind.

Helping you find the right level of protection

Risk Protection

At Markson, our financial planning advice includes an assessment of the level of cover that’s right for you. As we are financial planners and wealth advisers, we are able to act objectively and recommend products from leading insurers, helping you achieve the optimal balance between cover and cost.

Our key considerations include:

  • Your life stage and the extent to which your investment strategy relies on your income
  • How many dependents you have, and their age
  • Your level of your current debt, such as mortgages (and other loans) and credit cards
  • The adequacy of any risk protection you may already have in place, such as life insurance included with your superannuation, or salary continuance cover provided as an employee benefit.

As your life circumstances change, such as commencing or ending a relationship, welcoming a newborn to your life or even receiving a promotion or pay raise, you need to reassess your level of cover to ensure it remains relevant and adequate.

The main types of financial risk cover

Term life

These policies pay a lump sum upon death or terminal illness, ensuring that your dependents are able to maintain a reasonable standard of living and look forward to a secure financial future. As a general rule, your cover should be enough to pay all large debts as well as provide your family or other dependants with a lump sum that can be invested to earn an income to replace your lost earnings.

Total and permanent disablement (TPD)

This type of cover pays a lump sum should you become totally and permanently disabled through illness or injury. By preventing you from earning an income at a time when may you have additional expenses to cover such as medical, rehabilitation or even home modification costs, a total or permanent disablement can create a significant financial burden and cause great emotional stress for you and your family. TPD benefits help ease the financial concerns experienced at this difficult time.

Trauma or crisis

These policies provides a lump sum payment to help you recover from a traumatic event such as a heart attack, cancer or stroke. This lump sum can be used to ease financial stress during a period of recuperation, where the cost of items such as home modifications and specialist medical attention may be incurred.

Income protection

Unlike the above policies which pay a lump sum, income protection insurance is designed to replace a portion of your salary (usually up to 75%), when you’re not able to work due to illness or injury. As well as helping you pay everyday bills and meet mortgage payments, income protection cover minimises the need to draw on savings to meet additional out-of-pocket medical and rehabilitation expenses.

Do I need risk protection

If you answer YES to any of the questions below, you should give serious consideration to having life, TPD or trauma insurance cover:
  • Do you have debts such as mortgages, credit cards or personal loans?
  • Do you have dependants? How will their ongoing needs such as education expenses, be met without the support of your income?
  • Do you have children from a previous marriage? Blended families tend to create more insurance needs.
  • If you are in a relationship, are you both in paid work? If your household needs two incomes to maintain your mortgage repayments and existing lifestyle, both of you should have adequate insurance cover.
  • Do you have dependent parents? Something we often overlook is our responsibility to help care for our ageing parents.
  • Do you have loose ends which need tying up, such as money owed to family or friends?
If you answer NO to any of the questions below, you may need to consider income protection insurance cover:
  • Are you wealthy enough to be able to survive without your income?
  • Could you maintain your current lifestyle on social security (Centrelink) benefits?
  • Will your accumulated sick leave cover you for a long-term illness? Of course, if you are self-employed, you don’t have any sick leave…
  • Could you maintain your superannuation contributions if you didn’t have income?
Legal Disclaimer

The above information has been prepared without taking account of your objectives, financial situation or needs. Before acting on this information, consider its appropriateness having regard to your objectives, financial situation and needs. If the information relates to the acquisition, or possible acquisition, of a particular financial product, you should obtain a Product Disclosure Statement relating to the product and consider the Statement before making any decision about whether to acquire the product.

For adequate and effective risk protection that provides peace-of-mind and minimises the financial impact of an unexpected event, talk to us today. Call (02) 8007 6244.
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