Tag: Business

BUSINESS/FINANCE: How to Protect Your Income?


By Balki Balakrishnan*

Melbourne: A typical family should have these five types of insurance covers – Life & Terminal Illness (TI), Total & Permanent Disability (TPD), Trauma (Critical Illness), Income Protection and Child Trauma covers. In the last edition of this newspaper, we explored the features of Trauma Insurance.

This article looks at Income Protection cover to help you understand what you should be mindful of in regards to this cover.

Income protection insurance provides a monthly benefit to help you stay on top of your debts, pay for medical bills and generally give you the means to maintain a reasonable standard of living if you are not able to earn due to an injury or illness. In the event of a claim, the insurer will pay an amount (normally up to 75 per cent of your gross salary in Australia) until you have returned to work again, or up until the maximum benefit period as stated in the policy which is normally two year, five year or up to age 65.

Most people wouldn’t drive without car insurance, or go without home & contents insurance. Why would you not protect your greatest asset which is the ability to earn an income? Your and your family’s lifestyle depends on it and more importantly, loss of this income will make living comfortably during retirement in jeopardy.

So, what are the chances of claiming on Income Protection insurance? In 2005/06 alone there were approximately 690,000 serious injuries in Australia. Of these, 45% were not able to receive financial assistance through workers’ compensation (Source: Australian Bureau of Statistics – Australian Social Trends 2007) leaving them to fend for themselves financially.
We hear about people suffering from lifestyle related diseases and insurance statistics confirm that more and more of us are exposed to trauma illnesses. Cardiovascular disease was the main cause of 480,548 hospitalizations in 2013/14, which is one Australian every minute. (Source: https://www.heartfoundation.org.au/about-us/what-we-do/heart-disease-in-australia).

Assuming you were unable to work because of an illness or injury, how long do you think you can survive on zero income before you need to sell your assets? The fact is a significant portion of working Australians could only survive less than one month without their income before needing to sell their assets (Source: Zurich Misinsurance Whitepaper February 2014). We really don’t want us and our family to be in this situation.

Income Protection cover can be organized within your super environment similar to Life & Total & Permanent Disability (TPD) covers. However, you should be mindful of the conditions under which you will be paid on a claim. You can organize your cover outside super environment but linked to your Life policy in the super environment to reduce the premium. One of the good outcomes of organizing the cover outside your super environment is that it is tax deductible at your marginal tax rate. You may also have a better claim experience because they are fully underwritten.

Depending on the insurer, you may be offered various types of covers with different features and premium structure. Most of the insurers will offer you a guaranteed/agreed outcome on a claim or an indemnity type of benefit where the amount paid is determined based on your income at the time of claim. You should also be cognizant of the tiers of definition the insurer’s offer and the difference between them before choosing an insurer. Another critical element to consider is the benefit period. The benefit period is the maximum period you are paid on a claim. It can range from 2 years to age 65. You also should be mindful of the waiting period feature on this type of cover. The waiting period typically ranges from 14 days to 2 years. The waiting period depends on your circumstances and therefore there is no one solution for all.

How much you should be insured for, what financial outcome you can expect if you were to make a claim, how long you need to be insured for, whom to insure with, and the features of cover you would need can be a daunting matter. Income Protection cover needs to be considered along with other types of insurance covers as well so that you and your family are protected in the best way possible. The Financial Advisor who will educate you, discuss with you and ultimately implement a solution that is appropriate to your circumstances, needs and your budget. It is important that you get this cover correct the first time to avoid unpleasant surprises at the time of claim.

Opes Financial Solutions Pty Ltd trading as Opes Financial Planning ACN 618 122 795 is an Authorised Representative of Merit Wealth Pty Ltd AFSL 409361.

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please contact us at 0419 506 560 if you want more information or need to review your insurance covers.

*Director | Financial Advisor
Authorized Representative Number: 409415
Merit Wealth Pty Ltd. AFSL No: 409361
M: 0419 506 560

Victorian Premier leads super trade mission to India

By Rajeev Sharma & Neeraj Nanda

New Delhi & Melbourne: The Premier of Victoria Mr. Ted Baillieu is leading the state’s largest-ever trade mission to India this week with more than 220 Victorian companies to boost Victoria’s two-way trade and investment partnership with Indian businesses and the Indian community.
Mr Baillieu said this trade mission would focus on Victoria’s strengths to generate more jobs for Victorians and substantial new export opportunities and investment for Victorian businesses.
“The program will also build on the strengths of the growing Indian community based in Victoria to further broaden cultural ties through tourism, film, education, sport and other linkages,” Mr Baillieu said.
“India’s rapid economic expansion – which saw its GDP grow by 8.5 per cent in 2010-11 – offers significant opportunities to grow Victoria’s trade and investment partnerships with India.
“Victoria is not waiting, but doing everything in its power to capitalise on new opportunities in high growth markets, particularly India and China. There is extraordinary growth occurring and Victoria is moving quickly.
The trade mission will include ten major sectors of the Victorian economy including automotive, aviation and aerospace, cleantech, education, food and beverage, ICT, life sciences, professional services, sustainable urban design and tourism.

Senior economic ministers will also attend the trade mission including Minister for Innovation, Services & Small Business and Tourism & Major Events, Louise Asher, Minister for Manufacturing, Exports & Trade, Richard Dalla-Riva, and Minister for Technology and for the Aviation Industry, Gordon Rich-Phillips.
“More than 300 company and institutional leaders will be a part of this trade mission,” Mr Baillieu said.
A media release from the Premier says, “This mission will build on the successful trade mission to India involving 60 companies that was led in April this year by Minister for Innovation, Services and Small Business, Louise Asher. That trade mission is estimated to have generated more than $63 million in new exports, $19 million in capital investment and more than 500 jobs in Victoria.”

The Super Trade Mission will engage with businesses in Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Ahmedabad and Pune from 21 to 26 February.

Brumby launches Westpac language program for India and China

By our business reporter

Melbourne, 4 August: Victoria’s Premier John Brumby here today launched the Westpac Group’s new Cultural and language Learning Program for China and India.

Mr. Brumby said the program was an exciting new way to help staff and clients better engage markets in China and India.
“China and India are two Victoria’s most important partners, and so it is vital that we continue to enrich and deepen our engagement with these dynamic and rapidly transforming economies”, he said.

Alice Wong, Westpac’s Head of Asia and Migrant Markets said, “This initiative will help our customers who wish to engage in trade flow between Australia and Asian nations”.

Chairman of Asialink, Mr. Sid Myer said “the ‘Asian century’ means different things to different people, but what it does not mean is business as usual. Asialink is honoured to partner and The Westpac Group in its creative response to the challenge of doing business differently – providing new tools for the new century.