While no one wants to think about it, everyone us of us should work through what happens to the bills if suddenly you can’t go to work tomorrow or worse, if you go back to work permanently.
Osmonds Accountants and Financial Planners can help you work through the options and come up with a solution that will cost you less than you think. Typically, there are two main types of insurance that you can take out to help pay the bills if you can’t go to work.
The first is income protection. This insurance is to protect you from loss of income, if for some reason, typically because you are ill or have been hurt in an accident, you are facing an extended period off work.
Many people think they have income protection but unless you are paying about $2,000 a year for it, most likely what you have is a narrow type of accident insurance. While income protection is a legitimate tax deductible expense it is not cheap, so we only start considering it for those clients who are earning in excess of $100,000.
The second common type of insurance is life insurance and total and permanent disability insurance. As their names suggest they payout if you should suddenly die or are rendered permanently disable.
They can also be very expensive but we usually recommend clients hold these types of insurance within their superannuation funds, where they can be claimed as a tax expense to the superannuation account.
This can be a big plus, particularly for young families, who might be on a tight budget but still desperately need and warrant life and TPD insurance.
Just how much income protection or life insurance you need can be a difficult question to answer, but again Osmonds Accountants and Financial Planners can help you work through the options and come up with a cost effective solution for you.
In some cases, clients have specialist needs regarding risk insurance. In these rare situations I typically refer these clients to a trusted colleague, Phil Heath, who is a specialist in writing risk insurance.
So whatever your needs, make sure you discuss your situation with Osmonds Accountants and Financial Planners, so we can devise a cost effective solution for you.