2 March 2021
The Three Step Check-Up
One of the things that can make us feel better about the year ahead is taking control of our finances. That’s why I thought I’d write down a few things you might want to include in a ‘finance check-up.’ Read more
19th September 2017 - Private Wealth
Although life insurance isn’t a simple purchase, many providers claim that they can make it easy and stress-free. But how do you know you’re making the right choices? Here are five common mistakes you should try to avoid.
Mistake 1. Buying insurance online without sound professional advice
Generally, when you buy insurance over the phone, the assessment process seems simpler. But the truth is that the insurer is appealing to your desire for brevity and simplicity. But beware! This type of cover can mean hidden exclusions, cover limited to specific events, and assessment being carried out at the time of claim.
When you apply for cover through an adviser, you’re assessed at application time. It may take a little longer, but it means that you have some certainty when you’re accepted at application time. Unfortunately, the upfront benefit of simplicity can often prove very expensive, if the provider doesn’t pay out at claim time.
Mistake 2. Relying on the insurance in your industry super fund
Your industry super fund may have a component of insurance included, but it’s usually a minimal amount of protection up to a certain age, with poor definitions for payment. Many funds receive incentives for reducing claims paid to members. So the combination of this, together with poor definitions of the cover, often results in very poor claims experiences.
Mistake 3. Only considering price, rather than the actual value of the insurance
Price can play an important part in your decision to purchase personal insurance cover, but it’s not the only thing to consider. A common mistake is for people to cover themselves against the risk of death, but have very little to no cover for other risks, such as disability or critical illness. This is largely due to the fact that death is cheaper to insure against.
Statistically, illness and injury are far more likely to impact the average person than death, which is why insurance for these risk events is more expensive. As insurance is designed to protect you from the financial impact of a risk event, and there is an underlying expectation to claim on the policy at some point, this also means that insuring the risk of illness and injury is likely to be far more valuable.
Mistake 4. Not considering how the structure of the insurance policy can impact benefits
Depending on your circumstances, you need to be aware of the possible implications of holding poorly structured life insurance. It could mean more tax is payable on benefit payments, or delays and additional costs involved in benefits being distributed to beneficiaries. An adviser can recommend the best options for you – helping to ensure that the right amount of money ends up in the right hands in the shortest timeframe, with less tax.
Mistake 5. Failing to review your insurance as your life changes
Changes caused by life events can be monumental or miniscule. They can range from the birth of a baby, adding a new room to the house or paying off the mortgage, to getting a promotion or re-entering the workforce. Every time you achieve a significant milestone in your life, it’s important to review your protection package to ensure that it still suits you and your family’s needs, so you get the best value for your premium spend.
If you would like more information please call 1300 ELSTON or email info@elston.com.au and an adviser will be in touch.
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This material has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this material is General Advice and does not take into account any person’s individual investment objectives, financial situation or needs. Before making an investment decision based on this advice you should consider whether it is appropriate to your particular circumstances, alternatively seek professional advice. Where the General Advice relates to the acquisition or possible acquisition of a financial product, you should obtain a Product Disclosure Statement (“PDS”) relating to the product and consider the PDS before making any decision about whether to acquire the product. You will find further details of the service we provide and any cost to you within the Financial Services Guide. Any references to past investment performance are not an indication of future investment returns. Prepared by EP Financial Service Pty Ltd ABN 52 130 772 495 AFSL 325 252 (“Elston”). Although every effort has been made to verify the accuracy of the information contained in this material, Elston, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this material or any loss or damage suffered by any person directly or indirectly through relying on this information.
2 March 2021
One of the things that can make us feel better about the year ahead is taking control of our finances. That’s why I thought I’d write down a few things you might want to include in a ‘finance check-up.’ Read more
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