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Risk Management and Insurance

Financial Planning is about both building wealth and also protecting against unforseen events that might leave you financially disadvantaged. It therefore makes sense to put as much importance on protecting your wealth rather than focusing on just building wealth. Insurance can be viewed as a financial resource that becomes available to you if something goes wrong.

If you suddenly fell ill or suffered a serious accident and could not return to work, what would happen to you and your family? How will you make payments on the mortgage, put food on the table and pay the light bill? Would you be willing to sell some of the assets you have been working so hard to build up? Without your income, where would you find yourself?

For most people the ability to earn an income has a direct output to how a person lives, however Australian's find themselves chronically underinsured in this area. I don't believe this means that Australians are happy to go on the bread line when they become ill. It is because most do not understand the role insurance plays in a sound financial plan.

The solution is to protect yourself and your family with an effective risk management plan. Your financial adviser can help you structure your financial plan so that if you are unable to work, you can still maintain your standard of living and keep your investments intact.

Risk insurance provides peace of mind that you and your family will be financially secure in the future. Similarly to the reason you are building wealth in the first place. To provide your ideal lifestyle today and in retirement.

There are different insurances for different needs. You may need a strategy incorporating all of them or you may just need some. An effective risk management strategy should be tailored to your circumstances as everyone's situation is different. Our Insurance Philosophy states that every client should have a personal risk management plan.

Life Insurance
Insures a life and is generally paid as a lump sum to the policy owner, nominated beneficiary or your estate at the time of death. Life insurance can used to repay debts and cover your dependants for the loss of income.

Total and Permanent Disability (TPD)
TPD is additional to life insurance but is often a rider on a life policy. It pays a lump sum if you can't work ever again because of illness or injury. TPD can be used to repay debts, cover medical expenses, make alterations on your home and replace lost income. Each insurer may use a different definition of TPD, therefore you should seek advice from your financial adviser as to a policy that is most suited to your circumstance. 
 
Income Protection
Protects your income if you are unable to work due to illness or injury. Income protection generally covers up to 75% of your monthly income. Some policies also allow you to insure your regular employer superannuation contributions.

Trauma
Trauma insurance is commonly used to pay for medical expenses, paying off the mortgage or to relieve financial pressures on the family.
The benefit is paid upon the diagnosis of a serious condition as specified in the insurance offer document. Most commonly claims are made for cancer, heart attack and stroke but many other conditions will also be covered.

Review

A sound risk management plan should be reviewed just like your wealth accumulation plan. How much cover you need will depend on a number of factors including:

• Your life stage
• Whether you have dependants, and how many?
• Your debt levels
• Your expense level

As your assets grow your need for insurance may decrease so it's important to review your cover regularly. This should be done as part of your overall financial plan.  To create a risk plan, Contact Us today.



Disclaimer: This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, you should consider whether the information is appropriate in light of your particular objectives, financial situation and needs.

Your Adviser may offer you services through Accountcorp Accountants & Advisers which is a separate business.

Although the same Adviser may offer you services under the above businesses, each business is solely and separately responsible for the advice they each provide. In particular, Securitor is only responsible for the financial planning services provided by Accountcorp Financial Planning Pty Ltd.

Accountcorp Financial Planning Pty Ltd is a Corporate Authorised Representative of Securitor Financial Group Ltd Tower 2, International Towers Sydney, 200 Barangaroo Avenue Barangaroo NSW 2000
ABN 48 009 189 495            AFSL 240687
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