Year-end Insurance Review

A significant number of Australians remain either uninsured, or under insured.

This can have dire consequences for families in the unfortunate event of a family member dying, having a serious injury or illness, or some other unforeseen event occurring.

While it is common to do end-of-year pre-tax planning or review our superannuation and other financial affairs, the end of the financial year is also a good time to have our insurances reviewed.

Reviewing insurance is not an easy task, but we are here to assist you. If you have questions about any of the issues mentioned in this email, please contact us.

Things to consider:

Type and scope of current policies

Is the insurance you hold still suitable to your circumstances?

As life changes and our family expands, we take on more debt, buy a new home – or reduce debt by paying off loans – our needs for insurance change. The types of policies we have, the current levels of insurance, the premiums we are paying, and policy terms and conditions, should all be reviewed time-to-time.

Now is a good time to have a personal insurance ‘audit’ carried out to ensure that the cover you have is appropriate for your family’s circumstances. 

Insurance ownership

Many people have their insurances attached to their superannuation. This may be appropriate, however, there are times when holding insurance through super may not be the best option.

For example, if you were to pass away and your insurance was paid to your parents, or other extended family members, imagine them having to pay 30% tax on the insurance benefit they receive! With proper structuring, this can be avoided.

By reviewing the way in which your policies are structured, we can ensure that in the event of a claim arising, the tax consequences are minimised.

“Protecting Your Super Package” 

Legislation passed in February 2019 may result in people with inactive superannuation accounts finding that their insurance cover held inside their super fund being cancelled. This will apply from 1 July 2019. 

If your super fund determines your account is inactive, they will write to you and inform you of the pending cancellation of your insurance.

If you receive such a letter from your super fund, it is important that you contact us without delay. Your insurance may be retained by either making a contribution to your super fund, or by making an election to retain your insurance.

Nominated beneficiaries

Many insurance policies (other than those held through super) enable you to directly nominate a beneficiary to receive the benefits in the event of a claim arising.

Nominating appropriate beneficiaries can be extremely useful as the insurance proceeds are paid directly to that person and do not form a part of your estate, to be dealt with under your will.

However, death benefit nominations need to be reviewed from time-to-time to ensure they remain appropriate. If you don’t have a death benefit nomination in place, it is something worth considering.

Insurance bonds

With increasing restrictions affecting the amount that may be contributed to super, insurance bonds provide a great opportunity to save in a concessionally taxed environment, without many of the restrictions applied to super.

Insurance bonds have been available for decades, however, there has been a resurgence of interest as a result of the government changes to super rules.

Modern bonds offer a wide range of investment options that allow you to invest in a manner that suits your personal investment goals and objectives.

If you would like to see how investing in insurance bonds might suit your needs, please talk to us.

Summary

Ensuring that you have a properly structured, affordable, and adequate insurance portfolio in place will ensure that in the event of death, disablement, temporary incapacity, or being diagnosed with a critical illness, your family is being provided for financially.

Contact Us

Should you have questions about any of the issues raised, or if you would like us to review any aspect of your insurances, or simply check that everything is on track, please don’t hesitate to contact us on (03) 6344 3899 or send a message below to arrange an appointment.

Disclaimer:

The information on this website is general information only and is not intended to be a recommendation. We strongly recommend you seek advice from your financial adviser as to whether this information is appropriate to your needs, financial situation and investment objectives.

Whilst every care has been taken in the preparation of this website, BND Financial Pty Ltd (‘BND Financial Services’), its directors, authors, consultants, editors and any persons involved in the construction of this website, expressly disclaim all and any form of liability to any person in respect of this website and any consequences arising from its use by any person in reliance upon the whole or any part of this website.