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Protecting the life (and people) you love With more Australians having children later in life, starting a second family and carrying significant levels of debt well into their 50s and 60s, life insurance has never been more important.

Life is full of unexpected twists and turns and you never quite know what is around the corner. Protecting your family against the loss of all the things you have worked hard for over the years is the cornerstone of a sensible strategy to defend your wealth and current lifestyle. Although most people know this, being ‘underinsured’ – or holding insufficient life-related insurance cover – remains common across all age groups in Australia.

noting 18 families in Australia lose a working parent every day of the week. One in five families is affected by the death of a parent, a serious accident or an illness that renders a parent unable to work.iii

The underinsurance problem

Increases in the number of second and blended families and ageing parents also mean many breadwinners now have more people than ever relying on them financially.

Australians are famous for their laid back attitude and, unfortunately, that attitude often extends to taking out life insurance protection for their families. While research shows more than three-quarters of us understand the need for life related insurance, rating it as important or very important, only 52 per cent of those surveyed said they actually held some form of life insurance.i Consulting firm Rice Warner has calculated that Australians should hold a total of $4,581 billion in life insurance to be considered adequately protected, but the actual figure held is only $2,770 billion.ii Although the typical middle-income Australian family with two children needs an estimated $680,000 in life insurance cover to be considered adequately protected, Rice Warner found that the median level of life insurance held by these families is only $258,000.

Paying your bills and protecting your dreams Without adequate life insurance protection, the financial burden arising from a serious illness, accident or death can cause severe financial hardship. Such an event is not uncommon, with the Lifewise/NATSEM Underinsurance Report

Life insurance protection may also be essential for singles, as they often have fewer resources to fall back on to pay their debts and ongoing commitments such as rent and mortgage repayments if they become seriously ill or disabled.

Guarding your wealth When it comes to developing a comprehensive strategy to protect your financial position, life insurance is a key component as it can create a safety net to protect your current lifestyle and the wealth you have accumulated. Without adequate insurance protection, many families find themselves facing real financial hardship if the main or secondary income-earner, or the primary carer of the children, becomes sick or dies. It’s important to look at your options in terms of life-related insurance as part of your financial goal setting. These products can provide a highly effective way of protecting assets such as the family home, enabling policy holders to cover their financial commitments in the event of a claim.

Life insurance benefits can be used in different ways depending on your personal circumstances and health, with the lump sum payment they may provide easing the financial burden during what can be a very difficult time.

A tailored approach For a complete wealth protection strategy, death cover is usually combined with other life-related insurance products such as critical illness and total and permanent disability (TPD) protection. Subject to each policy: • Life insurance pays a lump sum on your death or diagnosis of a terminal illness, • Critical illness (or trauma) cover pays an agreed amount if you are diagnosed with a specified critical illness, such as cancer or heart disease, • TPD insurance provides you with a tax-free lump sum if you are permanently unable to work due to accident or illness. These life-related insurances are designed to provide protection against the most common adverse life events and provide you with peace of mind so that if the unexpected happens, you and your loved ones have some protection. If you would like some advice on the right mix and amount of life insurance for your family and financial circumstances, don’t hesitate to call Master Plumbers’ preferred insurance brokers, Marsh Advantage on 1300 300 511.

i www.tal.com.au/about-us/media-centre/life-insurance-lacking-in-those-with-most-to-lose ii http://ricewarner.com/wp-content/uploads/2015/10/INFOGRAPHIC-UnderinsuranceinAus2014.jpg iii www.lifewise.org.au/downloads/file/aboutthelifewisecampaign/2010_0203_LifewiseNATSEMSummaryA4FINAL.pdf Marsh Advantage Insurance Pty Limited (ABN 31 081 358 303, AFSL 238 369) arrange the insurance and is not the insurer. This article contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire the product, refer to the specific policy wordings and/or Product Disclosure Statements available from Marsh on request. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. LCPA no: 17/0112.

48 | Australian Plumbing Industry Magazine | December 2017

Australian Magazine December 2017  

For over 25 years, Australian Plumbing has been the industry’s leading publication, delivering independent coverage of news and events.

Australian Magazine December 2017  

For over 25 years, Australian Plumbing has been the industry’s leading publication, delivering independent coverage of news and events.