Life, Disability, Income Insurance etc

Which Insurances Do You Carry?

  • Life Insurance

    Votes: 8 10.1%
  • Trauma/Disability Insurance

    Votes: 0 0.0%
  • Income Protection

    Votes: 4 5.1%
  • I'm insured for 2 of them

    Votes: 19 24.1%
  • I'm covered for the whole lot

    Votes: 27 34.2%
  • Nope. My money is better spent elsewhere

    Votes: 21 26.6%

  • Total voters
    79
  • Poll closed .
Just wondering who here has insurance (not including your Super policy) and which type. Ours (we have all 3 types) is costing $11K a year and I'm thinking about letting it go.
 
This one keeps coming up in conversation lately - and it's me that keeps bringing it up.

We also pay 11K and I think it's insane. 7K of that is income protection for my husband. I see us dropping it soon.

Why, #1 it would be tight but we could live on one wage if we had to (as it is he's reduced the hours he works in the last 2 years) and #2 we could save that amount in a separate account if we wanted to (or have more income to create money or pay down debt).

We both pay life insurance and permanent disability that costs us about 4K, which we're happy to pay.

Temporary sickneess and disability I get through my super (75% of my income).
 
Glad to know I'm not the only one paying extreme amounts.

A large part of ours is the income protection because we went the whole hog. For example, my husband is a record producer so if he gets hearing damage he can't do his job. The broker explained that if we have the wrong cover they wouldn't pay up and simply say he is still capable of working, just not as a record producer. Who wants to work in a sandwich shop though? I fully insured with income protection for the same reason.

Our life cover isn't crazy. $800K for mine and $500K for his. But man... $11K a year is SO much money it's hard to justify sometimes but if we cut something, well, I can't really figure out which part to cut!

Maybe the trauma one. We get a bit via Super if something happens, I just wasn't sure it would be enough but maybe I need to look further into that area.
 
For most people their personal insurances cost about 2-3% of their total income although this can increase with age. Trauma especially can increase as you get older, but that's because you're much more likely to claim.

The new FOFA (Future Of Financial Advice) rules which are being implemented include provisions for financial advisors to review your needs at least every 2 years. It's possible that your requirements for insurance have reduced as your income/asset/debt ratios have changed. It might be worth requesting a formal review. This is supposedly what advisors get paid a trail income for.
 
My husband and I have no insurance, Super aside. We're in our 20s and have no children so the 'what ifs' don't really keep us awake at night. We're more concerned with our long-term financial future and insurance seems a luxury we can do without at this point in our lives.
 
Rob and I have term life insurnace, which will pay out $1 mil each.
For this, we pay a total of $2300 a year.
This is enough to pay off our debt.
At the end of this term life, we will reassess, and see if we want to extend.

Our rentals are CF+, so income isn't a concern for us.
Disability isn't either.
 
11k per annum is insane!

I am in my mid forties and pay $67/mth ($804) for trauma and death cover is in my super.

I also am covered for 5k per month benefit.

Try Tower Insurance they offer competitive income protection/trauma cover.
 
None - waste of money.

Re life, if I die, who cares.

Re income, if I was out of a job, I'm sure I'd survive. Not that I plan to be on a job for long any way.

Re disability, money's the least if my concern if there was a disability.

PS: insurance is a rip off in this country I just found out, then again what isn't...
 
None - waste of money.

Re life, if I die, who cares.

You wife or partner might care if you die and leave a debt which means they have to sell your investments. Even if you have no investments, I'm sure someone would care :confused:

Re income, if I was out of a job, I'm sure I'd survive. Not that I plan to be on a job for long any way.

Do you have to pay a mortgage or pay rent? Feed yourself and/or a family?

Re disability, money's the least if my concern if there was a disability.

Actually, money would be a major concern. The other problem might not be fixable or could mean big spending on wheelchair access or similar. How would you pay for that. Who would pay the mortgage and feed you and/or your family?

PS: insurance is a rip off in this country I just found out, then again what isn't...

I'm not sure if your answer was tongue in cheek, but for about $3,000 a year we have top up life insurance to put together with our superannuation life cover to cover us for $1M if either of us dies. This would pay out our debts and allow the remaining person to have a breather, and have time off work if required and not have to worry about money.

Hubby has income replacement insurance for about $2K per year. It means we wouldn't have to sell a house if he couldn't work. We made sure we didn't get a policy that makes him take on "any" job. It's no good dropping income by $80K just because he "can" work as a loo cleaner.
 
wylie, that pretty well sums up why we've paid it up till now.

Our expenses have dropped by about 15K since the eldest left school (that's what we figured he cost us in year 12 anyway).

If we cut the income protection, another savings of 7K, that makes us 22K better off. In other words, 22K less that we'd require if hubby got sick.

The 7K wouldn't be a tax deduction, but if we diverted it to a savings offset account we'd still have the money if it wasn't required, and we'd keep a tax benefit.

sash, income protection cover varies greatly, depending on the industry you work in.
 
11k per annum is insane!

I am in my mid forties and pay $67/mth ($804) for trauma and death cover is in my super.

I also am covered for 5k per month benefit.

Try Tower Insurance they offer competitive income protection/trauma cover.

I'll definitely look into it thanks Sash.
 
...also...look at the policy commencing after 90 days and if you are say over 55...look at a 5 year policy. This also makes it cheaper.

As for life insurance...it should cost less than 500per year for say 250k worth of cover.



I'll definitely look into it thanks Sash.
 
I have all three, probably a bit over-insured, but my premiums are quite cheap (though age is a factor here).
$2M Life and $2M TPD, ~$1700 pa in an industry super fund.
$300k Trauma, outside super.
And 75% of my income, outside super.
 
We found cover was cheaper if it was for 75% of your income (industry funds appear to all be this - could be wrong though).

RC, many businesses or self those employed still have business expenses and overheads which don't automatically all go away when you're unable to work, as you would be aware.

Say you recieve $750 a week based on 75% of 1K, and you still NEED to pay out $250 to the business, then technically you're only really getting $500pw.

This is why we've had to pay more for a fixed amount per month. 75% of income didn't cut it for us.
 
am I missing something about income insurance from a super fund vs income insurance from another company? is there a difference?
 
Weg, yes I faced a similar problem when trying to sort this originally. I wanted to insure for more and have 3 employees, but essentially I'm the bread winner. The hardest part for them to understand was that if I took 2 months off, I would still have income, but not so much in 6-12 months time given we're always working that far in advance.

Seeing the comments here has been helpful... I think I need to investigate what my industry super fund can offer as well.
 
am I missing something about income insurance from a super fund vs income insurance from another company? is there a difference?

The difference is the industry funded income protections only last 2 years and have a fairly narrow defenition compared to most retail insurances. Most other policies can continue to pay until age 65.

Weg, unless you're willing to pay extra, all income protection policies only cover 75% of your income. The idea is to encourage you to get back to work.

Fifth, it you take insurance now, with a level premium, you'll find it's much cheaper over the course of your life. Insurance tends to get very expensive as you get older. A level premium will lock in the cost whilst you're young and it's still cheap.
 
its also much easier to get these insurances when you are younger and healthier... I wouldnt wait too long to get them.
I got knocked back from income protection insurance when I was in my 20's, because I'd had severe tendonitis in both arms. I probably should have reapplied at a later date, but didnt.
At that stage, my income was quite low, and didnt matter too much. Now I have a much much higher salary, and no chance of getting insured because of other health issues.
So, I would encourage you to join up when you're young and able...
 
The new FOFA (Future Of Financial Advice) rules which are being implemented include provisions for financial advisors to review your needs at least every 2 years.
Does it mean we need to do a new ‘underwriting’ each time we review? Isn’t, generally, our health is going to get worse over time which would increase the premium?



Re life, if I die, who cares.

Re income, if I was out of a job, I'm sure I'd survive. Not that I plan to be on a job for long any way.

Re disability, money's the least if my concern if there was a disability.

PS: insurance is a rip off in this country I just found out, then again what isn't...

Life insurance: I agree. I think the super is enough as generally this can pay the home mortgage so that the family can atleast have a home.

Income: I think I have more expense if I don’t go to work! Mainly fuel, phone charges and utility bills!

Trauma: I disagree here. Money should be the least concern if we are unlucky to claim this. Trauma is going to cost the family lot more the death.



look at the policy commencing after 90 days…
I noticed that there is a bit of change when you hit 90 days… but nothing significant after that say 6 months or slightly more.


am I missing something about income insurance from a super fund vs income insurance from another company? is there a difference?
Outside super is tax deductable.


it you take insurance now, with a level premium, you'll find it's much cheaper over the course of your life. Insurance tends to get very expensive as you get older. A level premium will lock in the cost whilst you're young and it's still cheap.

I was lost when I was faced with this level and step premiums. Here is an explanation for people like me.

Stepped Premiums – Insurance Premium is calculated on our age, meaning the younger we are the cheaper the cost.

Level Premiums – Insurance Premium is calculated on a average premium, meaning you might pay more younger but you pay a lot less when you get older.

I understand that the level is cheaper in long run. However, here are few concerns.
1. I don’t like paying now for something which we may use 20 years later
2. Is it a waste of money (spending more now) if I die early?
3. Taking only the nominal values I think it takes about 6 years for step and level to meet. If we take the real values it would be lot longer. Does anyone have proper for level Vs step premiums comparison with indexation?
4. If I’m planning to reduce my working ours by 55 then is having ‘level’ really worth it? I get the feeling that it may be worth it if we are going to work till 65.
5. What if the insurance company disappears? Can we transfer to another company?

Anyway… it is all a bit too much. It is better to get a broker to come up with the solution and then drill them :)
 
Consider that some insurance premiums are tax-deductible so it may not cost as much as you may think. Of course insurance money is 'wasted' for the vast majority of people - that is how insurance companies make their money! I personally think this type of insurance is best suited to a family where there is only one working parent and any death/injury would have a major impact.
 
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