Income Protection, Life Cover & Total Disability (TPD) Insurance – If you have a mortgage and other debt, this is an area you must consider or, where you have something in place, you must review every time you make a purchase or increase your debt.
Case Study
James is a 42 year old professional, earning $100,000 per year. He is involved in a serious car accident. His prognosis is that he is unlikely to be able to return to work for at least 5 years due to the severe injuries sustained. His income disappears & he must now be cared for.
James and his partner Susan own a house and the mortgage is in excess of $500,000. Susan works part time with an annual income of $48,000 and they have two children enrolled in private schools. Susan’s income on its own, after tax, will not even pay the mortgage. James needs extra care and attention at additional cost. They discover to their horror that there is only $150,000 disability cover through their super. A year ago James was offered, but did not take out, Income Protection Insurance coupled with TPD. How now will the mortgage be paid? What about the private school fees? They are confronted with the prospect of selling their home, pulling the kids out of their schools and face a constant shortage of money, possibly for the rest of their lives. This disastrous scenario could have been completely different if James, after taking advice, held optimum levels of Income Protection insurance together with TPD. The tax free lump sum from the TPD payments
would have wiped out all debt and left a healthy balance for the family’s ongoing needs. Every month, to the age of 65, the family would have received Income Protection payments from their insurer. Sufficient capital would have been tucked away for private schools, weddings, travel and other life experiences considered vital by most families.
Anyone with significant debt and dependants, especially young children must have adequate insurance in place. The alternative is to accept that your family would be at risk of financial ruin. If you would like to know more about Income Protection, Life Cover & TPD insurance policies or would like to review your existing policies, we have an affiliation with Omega Financial Solutions and as a result, your first consultation to examine your needs is complimentary.
Please feel free to contact: Max Moodley, Director
Tel: 02 9380 8144
Email: max@omegafs.com.au
Web: www.omegafs.com.au
Sir Winston Churchill, on the need to have proper insurance cover:
If I had my way, I would write the word “insure” upon the door of every cottage and upon the blotting book of every public man, because I am convinced, for sacrifices so small, families and estates can be protected against catastrophes which would otherwise smash them up forever. It is the duty to arrest the ghastly waste, not merely of human happiness, but national health and strength, which follows when, through the death of the breadwinner, the frail boat in which the family are embarked, founders and the women and children and the estates are left to struggle in the dark waters of a friendless world.
