I often speak with people who are buying property, be it first home owners, first time investment property buyers, or seasoned investors. In just about all cases they are borrowing money to complete their purchase, and thus taking on more risk.
Personal insurance such as Life Cover, Income Protection and Critical Illness cover are important when it comes to ensuring loans can be paid (or paid out) in the event of a serious illness or death.
Ask yourself these questions and think about whether you have enough personal insurance in place:
- How much insurance do you have in place at the moment? Surprisingly, the majority of people I speak with don’t know what level or types of insurance cover they have in place
- If you (or your spouse/co-borrower) were to die, what financial position would your family be left with? Without adequate life cover, many families would be left with debts and not enough income to maintain a good standard of living
- Many Australians would not be able to meet their financial commitments after 6 weeks if they were unable to work. How long could you and your family survive financially if your income wasn’t coming in?
- If you suffered a serious critical illness such as a heart attack, cancer or stroke would you be forced to keep working so you could pay the bills?
- Do you know if your superannuation fund holds any life or income insurance? Note: never transfer a super fund until you investigate exactly how much insurance cover you might be losing. You may not be able to get replacement cover.
- Have you reviewed your life, income and critical illness insurance portfolio in the past 3 years (or since you took on more debt)? You may not have enough cover, you might have too much, or you might be paying higher premiums than you need to. How will you know unless you regularly review the portfolio?
- Do you believe that insurance is a waste of money? It’s an objection I hear often. Sure, any additional cost is hard to swallow, but you’d probably never think about refusing to insure your house or car. Why refuse to insure your life or your income, which are worth far more than any material item?
If you have all your personal insurance needs perfectly in place and the questions posed don’t raise any issues, then I offer you my congratulations. That’s the way it should be in a perfect world.
But if any of the questions raise alarm bells for you then don’t delay seeking help to understand your existing portfolio and make any changes you need to. Of course Steve May Financial Services is ready and able to help, but most reputable financial planners can steer you in the right direction too.
You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Sensibly Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website
Nick Shanley, Steve May, Luke Styles and Shanley Financial Planning T/A Steve May Financial Services are Authorised Representatives / Corporate Authorised Representative of Sensibly Pty Ltd, AFSL 533923. Please refer to our website at www.stevemayfs.com.au to reference our Financial Services Guides.
