Inside super

1) You might have some already. If you’re an employee, you may already have some death and total and permanent disability (TPD) cover in your super fund. This can be an easy and cost-effective way to get basic cover without the usual medical tests.

2) You can pay premiums using super. Super funds can claim a tax deduction for some insurance premiums paid inside the super fund. This means your insurance premiums may be effectively paid with pre-tax dollars. This can help you take a higher amount of cover and use the tax savings to cover the additional premiums.

3) You can salary sacrifice. If you want to pay your insurance premiums inside super but don’t want to reduce your retirement benefits, you can top-up your super by setting up a salary sacrifice arrangement. However, if you do this you need to keep an eye on your concessional contributions caps (see below).

Outside super

1) You can protect your income tax-effectively. Income protection premiums are generally tax-deductible outside super – meaning there’s no tax benefit to holding this cover inside super.

2) You can use your concessional contributions caps for super, not insurance. There’s a limit to how much you can contribute tax-effectively to super each financial year. Currently, the limit is:
• $25,000 per year if you’re under age 50, or
• $50,000 per year if you’re age 50 or over (this is a transitional cap that applies until 30 June 2012).
If you have sizeable insurance premiums inside super and you need to make additional contributions to pay them, you could be limiting how much you’re able to put away tax-effectively for your retirement.

3) Your benefit is easier to access. Outside super, you are the owner of the insurance policy, and any benefits are paid directly to you or your beneficiaries. Inside super, the super fund owns the policy and your super account receives any benefits. To get that money out of super, you then have to satisfy a ‘condition of release’.  If you don’t, you may have to wait until your retirement age to get this money out of your super account.

With the 30th June approaching, it’s a good time to review your insurance needs to make sure you have the right cover in place, and that you’re making the most of the strategies available. For advice specific to you and your family, talk to your financial adviser today.

General Advice Warning:  This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances.  Please seek personal financial advice prior to acting on this information.

Now is the time to take some precautionary steps to protect your home and loved ones before a bushfire threat develops and ensure your Home Building and Contents Insurance is up to date and that it provides enough cover to replace your home and all its contents should the unthinkable happen.

Here are a few simple measures you can take:

• Regularly clean leaves from gutters and downpipes;
• Keep woodpiles and other flammable materials well away from the house;
• Trim any long grass or dense scrub near your property;
• If possible, have a 20 metre safety buffer around your home free of rubbish;
• Take time with your family to sit down and develop a plan, ensuring all family members know what to do in the event of a fire;
• Consider purchasing a portable pump to use from your swimming pool or water tank;
• Have a first aid kit and protective clothing ready should fire approach. 

These simple steps can make all the difference in protecting your home, business and family from a fire. And, if you are unsure whether your insurance is up to date or if it provides enough cover, talk to us or use our Home Building Replacement Cost Calculator or Home Contents Replacement Cost Calculator which can help you estimate the full replacement value of your home and contents.

Stay safe. ^Derek, Insurance Manager

No one thinks it is ever going to happen to them – but what if one day, you unexpectedly had a heart attack like one of our members Jan. Jan was 50 years old and fit and healthy, but one day after suffering from stress, Jan had a heart attack. Jan was told she was ‘half a centimetre away from death’ that day.

Luckily Jan had taken out trauma insurance as there was a history of breast cancer in her family. She received payment six weeks later and was able to choose what she wanted to do with the funds, such as pay off debt, or set aside the money for retirement as she may need to retire earlier.

“I now see why it is so important to be adequately insured to protect against unforeseen events in life particularly where health is involved, because it has a major impact on your life,” says Jan.

Some people are aware that they are at higher than normal risk due to family history. Sadly the majority of people who are diagnosed with cancer, cardiovascular disease or serious illness did not know they were at risk.

Dealing with the emotional consequences of suffering a serious illness can be hard enough, but adding financial stress on top of this can be devastating. Trauma Insurance eases the financial burden allowing you to focus on getting well.

Trauma insurance pays a cash lump sum payment in the event of contracting a specified disease or trauma and covers up to 58 defined events such as cancer, heart attack and stroke.

Trauma insurance gives you a lump sum payment to ease the financial pressures of not working and could be used to cover things such as:

• To pay for a specialist or possibly receive international medical attention
• The cost of modifications made to the home or relocating to more suitable accommodation
• Financial obligations whilst recovering (living expenses, debts) • Rehabilitation and recovery costs
• Paying off outstanding debts or providing an ongoing income
• A professional carer
• Enabling your partner or family member to reduce their working hours to look after you.

There are basically three types of policies available. ‘Comprehensive’ insurance will cover you for the damage to your vehicle as well as the damage you may cause to other people’s vehicles or property. ‘Third Party Property Damage Fire and Theft’ only insures your car if it is damaged by fire or as a result of theft as well as damage to other people’s vehicles or property that you cause with your vehicle. ‘Third Party Property Damage’ only covers damage you cause to other people’s vehicles or property.

When looking for an insurance policy to meet your needs and budget, here are five things to remember:

1. Think about who will drive the vehicle, even if only on occasions. Ask if there are any restrictions on who can drive the car, particularly young drivers.
2. Find out about the Excesses that apply. An Excess is the first part of the claim that you may need to pay depending on the circumstances of the accident. Ask about any additional excesses for young or inexperienced drivers, or if the policy provides the ability to select a voluntary excess allowing you to reduce your premiums.
3. Talk to your insurance consultant about the options available to tailor your insurance; for example, can you remove the excess for windscreen or other window glass breakage; is a hire car available should yours be off the road due to an accident?
4. Consider whether it is important to you to have a choice of repairer and see if the policy allows you to do so.
5. Resist the temptation not to have any insurance. You might be able to pay for damages to your own car, but can you also afford the repairs to someone else’s car or other property? What if you hit a high-end BMW or damaged a set of traffic lights? At the very least you should have third party property damage cover to avoid paying for these repairs out of your own pocket.

Find out more about car insurance which can be tailored to suit your needs.

Travel insurance covers you for things like medical bills in case of an accident while travelling, loss/theft, cancellation or disruption to flights and more.

A friend of mine recently returned from a holiday in Japan and dislocated his knee/ligament damage, without travel insurance he would have been responsible for large medical bills. I also recently returned from holidays where my return flight was cancelled and rescheduled for the following day, I had organised travel insurance through Companion Credit Union before I left so luckily I could claim my hotel for the night I was delayed, and transport to/from the airport due to the delay. Which I was very happy about!

Have you ever had to use your travel insurance? Tell me about it,

Cas