Approximately $800 million+ was wagered on Melbourne Cup Day.  It is part human nature to trust in luck or a big windfall such as winning the ‘big one’ at the Melbourne Cup or the lottery, and for most people it’s just good fun.  But statistically we know this is highly unlikely to happen.  We also know that a high proportion of people will suffer a significant health event throughout their working life resulting in their income stopping.

There is a greater chance of suffering a heart attack than winning the Melbourne Cup trifecta.  In fact, the confronting news is if you buy a tattslotto ticket the day before the draw, studies show you have a greater chance of dying before the lottery is drawn than winning it.

The challenge is to make sure we take the ‘gamble’ out of things that really matter, like protecting our family in the event we become sick / injured and are unable to work to ensure we can continue to pay the mortgage and living expenses.

What are the Odds?

A lack of financial preparedness can have significant impacts down the track.  No one wants to find themselves in a situation where they can no longer support themselves financially.  It is about making your own luck rather than simply hoping for the best.

If you wish to discuss your risk protection options further, please contact one of the advisers at JBS.

Australians love being able to enjoy life with their friends and family, travel the world and drink till the sun comes up.  In order to do so we earn, save, invest, borrow and do whatever is necessary to accumulate enough funds to enjoy the finer things in life.  For a lot of Australians, taking financial risks is simply a part of everyday life; trading stocks, gambling or buying investment properties.

Today, over 80% of Australians are taking the biggest financial risk and not protecting their biggest asset, which is their own ability to earn money.  It’s relatively easy to earn it, it’s easier to burn it and apparently 80% of us think it’s too hard to protect.

In 2012, the Australian Life Insurance Industry paid out $4.4 billion in total claims.  This stat isn’t meant to highlight the fact that insurers do payout, but highlights the fact that tens of thousands of Australians in 2012 died, suffered from a terminal illness, were diagnosed with a critical illness or suffered a serious injury or illness stopping them from earning their most valued asset, income.

There are several Personal Insurance types that can assist in protecting you financially such as Life, Total & Permanent Disablement (TPD), Trauma and Income Protection.  Each serves its own purpose; to provide financial aid in the event the proverbial dung hits the fan.  Yet 80% of us think…
•    “It’ll never happen to me”, $4.4 Billion says otherwise.
•     “I’m sure it’s in my Super”, maybe, but is it enough?
•    “It’s too expensive”, where else can you get $4.4 billion?

Although Super is a convenient funding mechanism for Personal insurance it doesn’t come without its difficulties, especially at claim time.

When you hold Insurance within a super fund, the super trustee effectively owns your insurance and it is their responsibility to ensure any insurance payment made into the fund meets a ‘condition of release’ before they can be withdrawn from your super fund.  These conditions are set by the Superannuation Industry (Supervision) Act 1993 (SIS Act) and includes insurance claim benefits.

In the event an insurer pays out a claim, the benefits (money) are paid to the super trustee, not you or your beneficiaries.  It is then up to the trustee to determine if you meet a ‘condition of release’ before paying you the funds.  So a few legislative changes have been introduced, effective 1 Just 2014 to align and hopefully resolve the double handling of claims.

The old way:
Pre 1 July 2014, if you implemented Insurance inside a super fund, in order to get the proceeds of a successful insurance claim in your hands, you were required to satisfy two separate conditions, as mentioned above:
1.    The definitions under the insurance policy set by the insurance company to pay out the claim; and
2.    The superannuation ‘condition of release’ rules set by the SIS Act.

Unfortunately for some people who successfully claimed on their insurance, this made the process difficult.  Just because the insurance company said, “yes you can make a claim”, didn’t necessarily mean your super fund would hand over the cash.

The simple fact of the matter was a misalignment if conditions existed.  Insurers were approving claims, paying the benefits to the super trustee, but the super trustee was holding the funds inside the members super account because a ‘conditions of release’ was not met.

The new way
From 1st July 2014, the aforementioned conditions must now mirror one another, meaning that definitions of insurance policies available under super are much stricter.  They must reflect the ‘condition of release’ rules governed by the SIS Act.  This however, does not come without its pitfalls:

You can no longer implement the following types of insurances inside super:

*  Trauma cover
*  Agreed value Income Protection
*  Own Occupation TPD

Because of these restrictions, you may have to fund portions or entire personal insurance policies from your own pocket.

On the upside this new ruling will reduce a lot of stress at claim time as it sets expectations and makes the process more black and white, rather than rainbow coloured.  The new legislation changes also respect insurances implemented prior to 1 July 2014, you just have to be aware that your super trustee may stop or reduce the claim payable to you, holding any ineligible funds that don’t meet a condition of release inside your super.

We think the legislative changes are a positive move as the point of personal insurance is to protect you and your family financially, in the event of a medical tragedy such as death, or major injury / illness.  Any simplifications made to the claims process is always welcomed as it reduces stress and minimises time wasted during an already stressful time for both the claimant and their loved ones.

If you want to know more or if you want a review of your insurances whether you’re a JBS client or not, give us a call and we can chat further.

Your children’s lives are full of great experiences and big adventures.  And as a parent, you’re there to support them every step of the way.  Most importantly, you’re there if your children ever get sick – regardless of the demands that may place on your time and your finances. No one likes to think about their children getting sick or injured but it is better to have a plan in place now to ensure you have options available to you should the unfortunate event occur.

Child Insurance can help you cover the extra financial burden of a serious illness, so you can do what ever it takes to get them healthy again.

What is Child Insurance?  Child Insurance pays a lump sum if your child suffers from a serious medical condition.  The point of Child Insurance is to provide funds to help you fund any out-of-pocket medical expenses, and allow you to take time off work to care for your child.  It is designed to get you by while caring for you child. To apply for cover your child must be aged between 2 and 18 years of age.

Conditions:  The types of conditions that Child insurance will provide funds for include cancer, blindness, brain damage, cardiomyopathy, chronic kidney failure, deafness, intensive care, loss of limbs / sight / speech, major organ transplant, meningitis, stroke, severe burns and a number of other conditions. Like all insurances, they vary between insurer and policy so you’ll need to refer to the Product Disclosure Statement of the product to know what your particular policy covers.

Cost:  Premiums for Child Insurance are inexpensive and easy to apply for.  There are no medicals or tests required and the cost can be as low as $10 per month for $50,000 of cover.

Continuation of Cover:   When your child grows into a young adult, generally Child Insurance can be converted to Trauma cover without the need for any medical tests.  This allows your child to continue being comprehensively covered in their adult years.

Sadly, many children suffer from medical conditions and accidents which are serious.  Child Insurance provides financial support should the unforeseen happen to your children and most importantly reduces the financial stress to provide choices to aid in your child’s recovery.  JBS can assist in this area if you wish to discuss in more detail.

Hi Readers!  So you’re interested in yours truly?

For starters, I’ve been with the JBS Team for 2 and a half years bringing my total experience in the Financial Services industry to just over 6.

My role within JBS is Risk Client Services and I take care of all things relating to Life Insurance, by helping our clients protect what’s important to them; their Families, Assets and Income.

How do I protect all of that you ask?  I’m a superhero disguised as a Risk Client Services Officer!  Just kidding!  I simply complete a complex analysis of the aforementioned using techniques bestowed upon me from great minds.

Have to keep it vague or everyone will be doing it!

So what makes ME tick you ask?

Like most I enjoy traveling, playing/watching sports, training in mixed martial arts and I recently got hitched in Las Vegas!  So maybe not quite like most.  I’d blog about my wedding but my Wife prefers to keep it out of the public eye.  Oooo, you’re intrigued now?! Too bad!

Something a lot of people may or may not know about me is I love all things photography – Places, Selfies, People, Food, Pets, Abstract…etc etc.

I’ve done a bit of traveling over the years and took thousands of pictures, after reviewing them I realised that 99% were rubbish or inadequate depictions of my memories.  So I said to myself, “It’s time to turn that 99% rubbish into 99% AWESOME!”…verbatim, aloud.   How you may ask?  I simply learnt how to use my camera…properly.  I studied a little, attended a few workshops and now I shoot around 60% awesomely, well at least I think so.

Here’s a snapshot of my work for you to enjoy, which can also be viewed on my Instagram – http://www.instagram.com/itookdispic

When we’re young and free with the world at our feet, we think that we’re pretty indestructible (I remember that time). Life’s all about fun! Travel, drinking, friends… who wants to think about grown up things like insurance? While we might not want to think about it, it doesn’t stop that fact that we all need it.

Let me throw some figures at you… According to the place with all the info (The Australian Bureau of Statistics), they say that:
– In 2009, 15% of people in ‘prime working age’ are disabled.
– There are 275 new cases of diabetes in Australia every day, while two million of us are at risk.
– One in five Australians will experience a mental health problem in their lives.

And the Australian Institute of Health and Welfare put out a report that said:
– Males were 2.2 times more likely than females to be seriously injured as a result of a land transport accident, while just over 50% of those seriously injured were aged less than 30 years.
– For those seriously injured due to traffic (on-road) accidents, 28.2% were judged to be suffering from injuries which were considered to be high threat to life.

Of AMP’s 2010 claim, youngest to claim on Total & Permanent Disablement was just 18 years old, Terminal Illness was 24 years old, and Income Protection was 19 years old.

But what does that mean for you as a young nipper? Well, those figures don’t discriminate against age. We like to think that these figures are for the 15% of the older population or the two million people other than me.

But the reality is that it has to happen to someone, so it might be you. While we can take measures to reduce the risk, we can’t eliminate them and so we should look at ways of ensuring that other aspects of our lives are not negatively affected by it. Personal insurance gives you that freedom to know that if something did happen, you wouldn’t have to worry about the money needed to pay for rehab or maybe the cost of the experimental treatment, renovations to your home or even just having your partner or your parents stop work to be by your side in your recovery.

If we look at the statistics, you’re more likely to have a major medical injury or illness than win tattslotto but I bet you’ve bought a ticket or two in your life. If you think you’re in with a chance to win the big bucks, then you’re in with more of a chance to have something go really wrong with your health. So, why wouldn’t you take out insurance?

Also, taking out insurance while you’re young can save you thousands in the long run. While you’re young, you’re relatively healthy and therefore taking out insurance is cheaper. You are more likely to get standard rates, which means that you are no more of a risk of claiming than anyone else your age, unlike when you’re older, rounder and doing less exercise. If you can get standard rates at a young age, you can take out level premiums. This means that you can spread the risk of claiming over the life of the policy rather than just year by year and save a heap in the long run!

So take time out from all the stuff young people do these days and do a grown up thing for just a minute or two! Once it’s in place, you don’t have to think about it again (we’ll review it for you to make sure that it stays relevant) and you can go back to your Contiki tours, absinthe and ipads. Oh and it covers for anywhere in the world.

To read more, click here.

You wouldn’t believe the amount of claims that were paid by our life insurance companies last year, so we thought we had better show you!  Industry statistics show a total of $3.5 billion in claims were paid out by Life Insurance companies over 2010 helping out a staggering 61,274 individuals and families.  The following table provides a breakdown of the insurance claims paid in 2010.

2010 CLAIMS PAID BY PRODUCT TYPE

This  enormous amount of $3.5 billion would not have been paid if it weren’t for the work that is done with clients, by advisers, to protect family lifestyles and assets and businesses from the devastating effects of illness and injuries.

An average of $14.3 million was paid to 245 Australians, each working day in 2010.

All of these statistics include data from the following insurance companies:
AIA, AMP, Asteron / Suncorp, AXA, BT, CommInsure, OnePath, Macquarie, MLC, Tower, Zurich

Key Points

•    Not one of these claimants expected to claim on their insurance.
•    If these claimants hadn’t received the $3.5 billion from their insurance policies, where else would they have got that kind of money?
•    This is not a one-off statistic:  over the previous 5 calendar years the total claims paid out from the above insurance companies to
policyholders totals just under $15 billion.

That’s a lot of people who didn’t ever want to claim – but had to.  How glad do you think they and their dependents were, to have been wise enough to take the good advice of their adviser and plan for the unexpected?

Are you adequately protected?  Is your cover right for you, your family, and your personal situation right now?  If you would like to discuss your personal situation or be added to the JBS Newsletter list, please contact us via our website or strategies@jbsfinancial.com.au.

Source: the risk store