| Insurance – do you need it, how much, and where from? |
Insurance – do you need it, how much, and where from?
It sounds like something you'd want to protect, right? But underinsurance is an issue facing an alarming number of Australians, from all walks of life. We face financial and non-financial risks every day, but many do not even give it a second thought. Set against the backdrop of your financial plans we uncover the gaps that may exist in being able to see the plans through if the main income earner had an accident resulting in death or disablement. Could the family survive and plans stay on track without that income? For example, a study conducted on 2005-6 by AMP/Natsem found it costs about $450,000 for the average family to raise two children from birth to age 20. For the average couple with two children today, the cost will be around $310 per week, or 23% of the average gross household income of $1,324 a week. The insurance we're talking about is life insurance – the most common forms of which are death cover, total and permanent disability (TPD), trauma insurance and income protection insurance. Life insurance isn't just about protecting your family financially if you die. It's also about protecting your lifestyle if you get sick or injured. So if you can't work for a while, or ever again, you've got a financial back-up plan. Insurance for business owners
So if they know they're not properly covered, why aren't they doing something about it? One of the reasons is that there's perception insurance is too expensive. But think about the sort of money you'd lose if you couldn't work for a few months. Or worse, if you could never work again. It certainly helps put the cost of insurance into perspective. Income protection insurance is one of the most relevant types of cover for professionals – including the self-employed. It can replace up to 75% of your income if you can't work because of sickness or injury. Business expenses insurance – which covers fixed business expenses like rent, electricity and non-income producing staff wages if you can't work because of sickness or injury – is also tax-deductible. So if you run a business, you can combine these two types of policies to cover your work and personal expenses. And potentially reduce your tax bill. Get the cover you need
1 Investigating Income Protection insurance in Australia' – IFSA, July 2006. Enquire about insurance for business owners or call us on 07 5443 5577. Find out more about your insurance needs based on your age group – visit The Wealthmaker |
You've worked to give yourself a good income. And your income is going to play a big role in your lifestyle, and that of your family, for a long time to come.
According to a 2006 survey¹ by the Investment and Financial Services Association (IFSA), less than half of small business owners feel they have adequate cover.
