Most working Australians are under-insured and a 2012 priority should be for them to check their income protection, trauma and life insurance to see if it is adequate, says Mr Michael Hutton, wealth management partner at HLB Mann Judd Sydney.
“We insure our homes, cars and other possessions adequately but often don’t see the need to insure our livelihood – or protect our family’s financial wellbeing,” he said.
“There seems to be a general misunderstanding that a compulsory super account provides adequate insurance. Yet this isn’t always the case and it is never tailored to suit individual circumstances and needs.
“When people look at their wealth management approach, wealth protection should be a major consideration.”
Mr Hutton said it’s true that life insurance paid for within superannuation is usually tax effective, but not everyone has this arrangement and those who do may not automatically have enough cover to protect their family.
“A prolonged illness or sickness, and even job loss, can mean the family needs to eat into accumulated wealth, doing irreversible damage to retirement savings plans.
“Every working Australian with dependants should consider how their family will fare if their income is lost, either permanently or for an extended period.
“There are very good loss of income or trauma insurance policies available which should be considered.
“Many families that have already accumulated wealth can become complacent, and can overlook their financial commitments.
“How will the mortgage be paid if income dries up for an extended period?” Mr Hutton said.
HLB Mann Judd Sydney is a firm of accountants and business and financial advisers, and a member of the HLB Mann Judd Australasian Association.
For more information please contact:
Michael Hutton – Phone: 02 9020 4194
18 January 2012