Risk insurance advice

Did you know that more than one in five working age parents will die, become seriously injured, or ill enough to prevent them from working.

Whilst most people would never consider driving a car without motor insurance, less than a third of us insure our most important asset - our ability to earn an income.

Would your financial position be affected if you were to suffer from an illness or injury?

Most of us are underinsured and the results can be devastating for families should there be a death or serious injury.

The key benefit of insurance is to make sure that you and your family are financially supported if any such occurrences eventuate in the future. There is no set formula for establishing how much Life, TPD and/or Trauma cover to have but some key questions will help.

Is your insurance on track?

To find out we have developed an INSURANCE RISK TOLERANCE AFFORDABILITY QUESTIONNAIRE.

Please complete all sections to ensure that your financial insurance calculation will be as accurate as possible.

Your name: *

Your date of birth: *

Your email address: *

Your best contact number: *

DISCOVER

This questionnaire is designed to measure your risk tolerance and affordability for your insurance needs. We will discuss how you understand both the risk of an insurable event occurring balanced against the cost of protecting against the risk.

The Insurance Tolerance Questionnaire has been developed to assist you in understanding:

a) You are comfortable with high levels of risk (a). You perceive no value in insurance./p>

b) You accept a higher level of risk (b). You are prepared to accept minimal insurance for catastrophic loss. You can not afford more extensive cover / do not value more extensive cover.

c) Acceptor of moderate risk (c). You are open to transferring risk to an insurer and accept the risk transfer within reason.

d) Risk averse (d). You want to transfer as much risk as possible to the insurer and will accept the cost of risk transfer.

Determining how you feel about insurance (your insurance tolerance profile) is a critical step in designing an insurance strategy for your needs. Answering the following questions will help your adviser decide on the profile that suits you

INDICATIVE RISK PROFILE

Risk Averse: 31–40 | Moderate: 21–30 | Acceptor of Higher Level: 11–20 | Acceptor of High Risk: <10

Please check the box (A, B, C or D) to select one answer for each question below. Your risk score will be the total points for the ten questions.

Each answer is given a risk score:

4 points for each D choice
3 points for each C choice
2 points for each B choice
1 point for each A choice

1. ALL INVESTMENT CARRIES RISK. WHAT IS YOUR ATTITUDE TO INVESTMENT RISK?

choose the best option for you

A. My aim is to maximise returns and I rarely consider the risk associated with the investment in question.

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B. I always examine risk, but I am prepared to accept higher levels of risk for greater returns.

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C. I strike a balance between investment risks and returns when making investment decisions.

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D. I am risk averse and seek to avoid investment losses

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2. INSURANCE WILL REDUCE THE AMOUNT YOU CAN DEVOTE TO SAVINGS AND INVESTMENTS. WHAT IS YOUR RESPONSE TO THIS STATEMENT?

choose the best option for you

A. Capital growth is paramount. I will rely solely on my savings to cover any losses in the event of my death or disability and I will not waste resources on purchasing insurance.

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B. I accept that I will need to divert minimal funds from capital investment to fund basic insurance cover.

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C. Balancing security and capital growth is an important part of risk management. I accept that I will need to divert some funding to insurance of the requisite quality.

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D. Security of capital is paramount. Insurance provides the appropriate security. I accept the cost of transferring risks to an insurer, provided the cost is not prohibitive.

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3. LIFE INSURANCE COVER WITH EXTENSIVE BENEFITS IS MORE COSTLY THAT BASIC LIFE INSURANCE COVER. CHOOSE YOUR RESPONSE FROMTHE STATEMENTS BELOW

choose the best option for you

A. I am comfortable with the low risk of premature death or disability. I do not consider there is any value in insurance, and I will rely on my own resources.

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B. I accept that as a trade-off I will have to devote some funds to purchasing insurance cover, but I will keep this at a minimum.

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C. I accept that some insurance cover is required. I would accept the cost of sufficient insurance cover within reason.

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D. I would use insurance to cover all risks provided that the cost is not prohibitive.

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4. ASSUME THE PROBABILITY OF YOU HAVING A CLAIM UNDER A POLICYIS 5%, BUT THE LOSS IF IT DOES OCCUR COULD SIGNIFICANTLY IMPACT YOUR CURRENT LIFESTYLE. HOW WOULD YOU RESPOND?

choose the best option for you

A. I would not waste my money on insurance.

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B. I would take insurance cover for this 5% risk only if I can be satisfied that this loss compromises my lifestyle.

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C. I would take insurance cover for this 5% risk where the potential loss exposure to me is material in dollar terms even though it would not destroy my lifestyle.

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D. II would take insurance cover for this risk. A 5% probability of occurrence is too high.

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5. INSURANCE CAN PROVIDE FUNDING TO REPAY DEBT ON DEATH OR DISABILITY. WOULD YOU CONSIDER INSURANCE COVER BEYOND THIS BASIC NEED?

choose the best option for you

A. I would not take insurance cover and rely on my assets or social security to cover any loss arising on death or disability.

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B. I would want insurance cover sufficient to cover debt, and I will rely on my own resources to fund any other losses.

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C. I would want insurance to repay debt on my death and disability plus an additional amount to contribute to my lifestyle or that of my family after my death or disability.

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D. Not only do I want sufficient insurance to repay debt on my death or disability, but I need cover to provide a buffer against any other losses which may arise on my death or disability.

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6. WHEN YOU CONSIDER THE LIKELIHOOD OF PREMATURE DEATH OR DISABILITY, WHAT IS YOUR REACTION?

choose the best option for you

A. Stressing about this likelihood is unproductive. I will confront my disability when A that occurs. Similarly, my family will confront my premature death when that occurs.

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B. I would use minimal insurance to cover losses on my death or disability, as the financial stress of paying the higher insurance premiums of more comprehensive cover is not acceptable to me.

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C. I would endeavour to cover as much of my loss exposure using insurance without creating cash flow stress.

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D. The prospect of these losses gives me sleepless nights. I would endeavour to use insurance to cover as much of this risk as I can. I will even consider cutting back on other expenses to meet premium commitments.

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7. ASSUMING THAT YOU SEE VALUE IN HAVING INSURANCE, WHAT PORTION OF YOUR DISCRETIONARY SPEND IS AVAILABLE FOR INSURANCE?

choose the best option for you

A. 0%

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B. 0% - 5%

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C. 5% - 10%

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D. Greater than 10%

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8. ASSUME THAT YOUR INCOME WAS LOST THROUGH DEATH OR DISABILITY, AND YOU ARE COMPELLED TO USE YOUR SAVINGS (OTHER THAN SUPERANNUATION) TO FUND YOUR LIFESTYLE. HOW MANY MONTHS WOULD YOUR SAVINGS LAST?

choose the best option for you

A. Greater than 12 months

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B. 6 to 12 months

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C. 3 to 6 months

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D. Less than 3 months

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9. WHICH STATEMENT MOST ACCURATELY REFLECTS YOUR VIEW OF PRIVATE HEALTH INSURANCE?

choose the best option for you

A. Private health insurance does not represent value for money. I have minimal insur- ance to avoid government-imposed penalties.

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B. I have minimal hospital cover only. I cannot afford gold and platinum levels of health insurance.

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C. I limit my health insurance to gold or platinum hospital cover. This covers the risk of financial loss in the event of any family member being hospitalised.

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D. I carry the most comprehensive health insurance plus extras cover.

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10. WHICH STATEMENT MOST ACCURATELY REFLECTS YOUR MOTOR VEHICLE INSURANCE COVER?

choose the best option for you

A. Motor vehicle insurance does not present value for money. I do not have car in- surance other than compulsory third-party insurance.

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B. I have balance of third-party and theft cover. I cannot afford comprehensive car insurance cover.

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C. I carry comprehensive car insurance with the maximum excess and no extras such as vehicle hire while I am on claim.

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D. I carry comprehensive insurance cover with minimal excess and all the extra features, such as vehicle hire, while I am on claim.

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RISK PROFILE SCORE

Risk Averse

31–40

Moderate

21–30

Acceptor of Higher Level

11-20

Acceptor of High Risk

<10

Total score

0

Your risk apetite

N/A

What profile would identify you?

Agreed Risk Profile

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CLIENT ACKNOWLEDGEMENT

we acknowledge the suggested insurance risk profile noted above has been generated from the answers I/we have provided.

I/we declare that I/we am/are comfortable with the risk profile(s) that I/we have been assigned and I/we understand that this will be used to assist in determining appropriate insurance strategies and affordability.

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✍Client Signature:

____________________________

📅Date of Completion:

____________________________

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Company:

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Do you have a mortgage?
Do you pay school fees?
Do you have any personal loans?
Do you have credit card debt?
Do you have dependents?

If you answered yes to any of the above questions, and you are unsure what to do about your insurance needs, now would be a good time for us to have a no obligation chat.

Every adviser at Future Wealth Planners understands that one of the most critical components of any comprehensive financial strategy is protecting your personal and financial wellbeing from unforeseen illness, injury, permanent incapacity, traumatic illness, or death.

Our insurances solutions include:

Term Life (or Death) insurance – which pays a lump sum benefit if the insured dies during the term of insurance.
Total and Permanent Disability (TPD) insurance – pays a pre agreed lump-sum amount if you suffer a long-term illness or injury making you totally and permanently unable to work.
Trauma (also known as Critical Illness) insurance - pays a lump sum if you suffer from one of the specified health traumas in the insurance policy.
Income Protection insurance – pays a monthly benefit that pays you up to 75% of your pre-tax income and covers you if you are unable to work for a medical reason. It is paid until you return to work and if necessary until you are 65 (depending on your occupation).

Over the many years we have observed the invaluable advantages a responsive and comprehensive insurance strategy can have in difficult and painful times.

We understand that it can be difficult to determine the type and level of cover you might need, let alone choosing an insurer.

With decades of experience, we are experts in working out what your needs are and recommending an insurer that is right for you.

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GET IN TOUCH

If you would like to have a chat with one of our qualified and experienced advisers, please click on their link below:

Bill has been in the financial services industry since 1981 and has been practicing as a fully qualified Financial Planner since 1997. Bill speaks "Superannuation" fluently and enjoys helping people understand what they have and what options best suit them.

Bill is authorised to provide advice on the financial strategies and products stated in this Financial Services Guide.

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Gina has over 20 years’ experience in the financial services industry. Specialising in pre- and post-retirement planning, Gina enjoys working with clients to understand their financial objectives now and in the future.

Gina is authorised to provide advice on the financial strategies and products stated in this Financial Services Guide.

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With an understanding built from his own experience of what is required to stay financially afloat during unforgiving times, an ability to explain the need for strategic future planning with the use of a postal stamp, and a penchant for cutting through unnecessary jargon, Karl aims to provide clients with a wealth management service that puts their financial goals within reach.

Karl is authorised to provide advice on the financial strategies and products stated in this Financial Services Guide.

Book a phone appointment with Karl

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Financial Planning services are provided by Future Wealth Planners Pty Ltd, a Corporate Authorised Representative (325961) of Sentry Advice Pty Ltd. Australian Financial Services Licence No. 227748 ABN: 77 103 642 888)

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This website is published by Future Wealth Planners Pty Ltd. Brenton Jones (AR No 224479), Gina Abuda (AR No 424876), William (Bill) Hackett (AR No 243411), Karl Hombergen (AR No 231356) and Future Wealth Planners Pty Ltd (CAR No 325961) are authorised representatives of Sentry Advice Pty Ltd (ABN 77 103 642 888), AFSL 227748. The information contained in this website and any of the resources available through it including eBooks, fact sheets, and seminars (‘Content’) has been prepared for general information purposes only and is not (and cannot be construed or relied upon as) personal advice. No investment objectives, financial circumstances, or needs of any individual have been taken into consideration in the preparation of the Content. Financial products entail risk of loss, may rise and fall, and are impacted by a range of market and economic factors, and you should always obtain professional advice to ensure trading or investing in such products is suitable for your circumstances.

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