Protect your family from life’s Surprises

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David HasibDavid Hasib

A recent survey conducted for the Financial Services Council by Rice Walker found that only 4% of those with dependants have sufficient life insurance .  This has the potential to greatly affect families who aren’t covered if one parent were to die.

Sufficient life insurance is generally accepted to be at least 10 times the insured’s earnings.  But alarmingly, six in ten people with dependants don’t have enough life insurance cover to look after their loved ones for more than one year if they were to die.

Having been in the finance industry for a number years, I believe these alarming results could be due to a lack of awareness about the types of life insurance solutions available and the cost of purchasing cover.

Many people insure their home and their car, but fail to insure their most important asset, their ability to produce an income, which is also their life. People fail to realise the value of their ‘working’ life.  It supplies the capital that fuels the lifestyle that you and your family enjoy, not just now, but well into the future.

The table below demonstrates just how valuable an ‘asset’ your ability to produce an income is. It shows your potential earnings over 20 years and takes into account annual CPI increases (3% pa) and pay increases (3% pa).  The table represents your gross income, cumulating over time.

Even an annual income of $30,000 today is potentially worth more than $1 million in 20 years time.  Imagine no longer having access to that potential income –  through injury, illness or death – which is so vital to you and your family.

 

Who wants to be a millionaire?


Annual income in Year 1 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000
Total income Year 2 61,800 82,400 103,000 123,600 144,200 164,800 185,400 206,000
Total income Year 3 95,508 127,344 159,180 191,016 222,852 254,688 286,524 318,360
Total income Year 4 131,238 174,985 218,731 262,477 306,223 349,969 393,715 437,462
Total income Year 5 169,113 225,484 281,855 338,226 394,597 450,967 507,338 563,709
Total income Year 6 209,260 279,013 348,766 418,519 488,272 558,025 627,779 697,532
Total income Year 7 251,815 335,754 419,692 503,630 587,569 671,507 755,445 839,384
Total income Year 8 296,924 395,899 494,873 593,848 692,823 791,797 890,772 989,747
Total income Year 9 344,739 459,653 574,566 689,479 804,392 919,305 1,034,218 1,149,132
Total income Year 10 395,424 527,232 659,040 790,848 922,656 1,054,464 1,186,272 1,318,079
Total income Year 11 449,149 598,866 748,582 898,299 1,048,015 1,197,731 1,347,448 1,497,164
Total income Year 12 506,098 674,798 843,497 1,012,196 1,180,896 1,349,595 1,518,295 1,686,994
Total income Year 13 566,464 755,286 944,107 1,132,928 1,321,750 1,510,571 1,699,392 1,888,214
Total income Year 14 630,452 840,603 1,050,753 1,260,904 1,471,055 1,681,205 1,891,356 2,101,507
Total income Year 15 698,279 931,039 1,163,798 1,396,558 1,629,318 1,862,078 2,094,837 2,327,597
Total income Year 16 770,176 1,026,901 1,283,626 1,540,352 1,797,077 2,053,802 2,310,528 2,567,253
Total income Year 17 846,386 1,128,515 1,410,644 1,692,773 1,974,902 2,257,030 2,539,159 2,821,288
Total income Year 18 927,170 1,236,226 1,545,283 1,854,339 2,163,396 2,472,452 2,781,509 3,090,565
Total income Year 19 1,012,800 1,350,400 1,688,000 2,025,600 2,363,199 2,700,799 3,038,399 3,375,999
Total income Year 20 1,103,568 1,471,424 1,839,280 2,207,135 2,574,991 2,942,847 3,310,703 3,678,559

 

 

There are many insurance products available that come under the ‘life insurance’ umbrella’.  So understandably, trying to evaluate the best product to protect your family can be daunting, and I recommend seeking professional assistance when choosing a life insurance policy.

I would encourage anyone who does not have some sort of life insurance to make an appointment with my office for a comprehensive risk management assessment.  Those with life insurance, but who have not updated their policy recently, could also be at risk.  Life changes such as marriage, the birth of a child, or purchase of a house all impact your life insurance needs.

Contact Chan & Naylor Financial Planning on 1300 99 77 34 to make an appointment to assess your insurance needs.

Important Note: This material is of a general nature only and has been prepared without taking into account your objectives, financial situation or needs. Before making a decision based on this material, you should consider the appropriateness of this material in regards to your objectives, financial situation and needs.

 

David Hasib – Senior Wealth Planner

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