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If you’ve ever looked at your payslip and wondered whether there’s a smarter way to structure your income, you’ve probably asked:
What is salary packaging?
Salary packaging (also known as salary sacrifice) is a legal arrangement where you agree to receive part of your income in the form of benefits rather than cash salary. The goal? To reduce your taxable income and potentially increase your take-home pay.
In Australia, salary packaging is commonly used in:
But here’s the thing — it’s not automatically beneficial for everyone. The real value depends on your tax bracket, employment type, and long-term financial strategy.
That’s where structured advice from 360 Financial Strategists becomes important — because packaging income without considering superannuation, borrowing capacity or retirement planning can backfire.
Let’s answer it clearly.
Salary packaging is when you “sacrifice” part of your pre-tax salary in exchange for employer-provided benefits.
Instead of being paid fully in cash and taxed on 100% of your income, you:
This can reduce your taxable income and therefore reduce income tax payable.
The Australian Taxation Office (ATO) explains it clearly here:
https://www.ato.gov.au/individuals-and-families/jobs-and-employment-types/working-as-an-employee/salary-sacrificing-for-employees
One of the most common and effective uses.
You can salary sacrifice into superannuation, which:
This is particularly powerful for higher income earners.
At 360 Financial Strategists, super contribution strategy is often integrated into:
Salary packaging a car via a novated lease allows:
To be paid from pre-tax income.
However, it’s not always cheaper. The Fringe Benefits Tax (FBT) rules matter, and it’s worth reading up about them before you start discussing salary packaging with your employer.
If you work for certain not-for-profit or public benevolent institutions (PBIs), you may be able to package:
Up to a capped threshold.
This is one of the most financially powerful salary packaging arrangements available in Australia.
In some industries, work-related devices can be salary packaged.
For those approaching retirement, structured salary sacrifice can significantly boost super in the final 10–15 years of work. This is often part of a broader retirement transition strategy designed by 360 Financial Strategists.
Let’s talk practically.
If you’re in the 37% or 45% tax bracket, sacrificing into super at 15% tax can be powerful.
This group often gains the most due to generous FBT exemptions.
Strategic salary sacrifice can:
Can work well if:
At 360 Financial Strategists, we always assess whether salary packaging improves:
Because tax savings alone don’t equal smart strategy.
It’s not always beneficial.
Salary packaging can:
Before implementing salary packaging, we recommend reviewing it as part of your:
All services offer can help you with at 360 Financial Strategists.
Yes — potentially.
Banks often assess your taxable income after salary sacrifice.
If you’re planning to buy property, speak to a Mortgage Broker first.
This is where integrated advice from 360 Financial Strategists makes a difference. Salary packaging decisions should align with your property goals, not work against them.
It depends on:
There’s no universal answer.
That’s why tailored modelling is essential.
Salary packaging should never be viewed in isolation.
At 360 Financial Strategists, we integrate salary packaging into:
Our approach ensures:
Because smart financial decisions should work together — not against each other.
Salary packaging can be incredibly powerful — but only when aligned with your:
Before restructuring your income, speak with 360 Financial Strategists to ensure your salary packaging decision enhances — rather than complicates — your broader financial strategy.
Secure your financial future with 360 Financial Strategists—contact us today for personalised wealth creation and financial planning solutions.
Common uses include:
Yes — in most cases, the terms are used interchangeably in Australia.
Yes, if structured correctly. However, some benefits attract Fringe Benefits Tax.
It can. Certain reportable fringe benefits are included in income tests.
Only if you work for eligible not-for-profit organisations that allow living expense packaging.
Yes. Salary sacrificing into super increases concessional contributions and counts toward annual caps.
Buying property in Victoria is exciting… until you remember stamp duty exists.
For many buyers, stamp duty can add tens of thousands of dollars to the purchase price. So it’s no surprise that one of the most searched phrases in Australia right now is “stamp duty exemption vic” (2.9k searches per month).
If you’re wondering:
Let’s break it down clearly — and strategically — so you can understand your options and how 360 Financial Strategists can help you navigate this properly.
Stamp duty (officially called land transfer duty) is a tax paid when you buy property in Victoria. It’s calculated based on the purchase price or market value of the property — whichever is higher.
The higher the value, the higher the duty.
For example:
That’s serious money — and why understanding stamp duty exemption Vic rules is so important.
For official government guidance, refer to:
Let’s answer the big question directly:
Eligibility depends on your situation. The most common categories include:
Under current Victorian rules, eligible first home buyers may receive:
This applies to both new and established homes, provided you meet residency requirements.
Key Takeaways
Eligible pensioners may receive:
This is often misunderstood — and where advice from 360 Financial Strategists becomes critical, particularly if you’re restructuring assets or transitioning into retirement.
If you purchase off-the-plan (especially apartments), you may qualify for duty reductions based on the construction stage at the time of purchase.
The earlier you buy, the greater the potential concession.
Even if you don’t qualify for a full stamp duty exemption in Victoria, you may still receive reduced duty if the property is your main residence.
Victoria has introduced reforms allowing certain commercial property buyers to opt into a new annual property tax model instead of paying upfront duty.
This doesn’t apply to residential buyers — but it has sparked the popular search question:
“Is Victoria removing stamp duty?”
We’ll answer that shortly.
Yes — retirees generally still pay stamp duty.
There is no automatic exemption simply because you are retired.
However…
Eligible pensioners downsizing may qualify for specific exemptions or concessions, subject to:
This is where holistic planning matters.
At 360 Financial Strategists, we regularly work with retirees assessing:
Stamp duty isn’t just a property tax — it can affect your entire financial structure.
Let’s be honest.
There’s no “loophole hack” that legally eliminates stamp duty outside government policy.
But there are legitimate pathways to reduce or avoid it.
You may avoid or reduce stamp duty by:
This is where 360 Financial Strategists integrates:
Stamp duty strategy is never isolated from the bigger financial picture.
No — not entirely.
Victoria is not removing stamp duty for residential property purchases.
However:
For certain commercial and industrial properties, the government has introduced an option to transition from upfront stamp duty to an annual property tax after an initial transaction.
For residential buyers, current exemption policies remain focused primarily on:
Always check the latest rules via the State Revenue Office, Victoria.
Many buyers search for a stamp duty exemption vic calculator (30 searches per month) to estimate costs.
The official calculator is available via the State Revenue Office website. It allows you to:
But here’s the thing…
A calculator won’t tell you whether buying now vs later changes your financial trajectory.
That’s where 360 Financial Strategists steps in.
We don’t just calculate stamp duty.
We assess:
Stamp duty is a line item. Strategy is everything.
At 360 Financial Strategists, we approach stamp duty planning as part of:
This integrated model is what makes 360 Financial Strategists different.
Stamp duty decisions should align with your 5–10 year financial plan — not just your settlement date.
A couple in their late 50s recently approached 360 Financial Strategists to downsize.
They assumed they’d automatically avoid stamp duty.
They didn’t qualify for the pensioner exemption — but through structured modelling we identified:
The result?
They paid stamp duty — but improved long-term liquidity and retirement positioning.
Avoiding tax isn’t always the goal.
Optimising structure is.
Yes — unless they qualify under the pensioner exemption rules.
Primarily:
Legally, through:
There is no general retirement-based exemption.
Not for residential property.
Reforms apply to certain commercial property transactions only.
Because Google searches don’t know your financial situation.
Whether you’re:
360 Financial Strategists provides:
All under one coordinated strategy.
That matters when stamp duty can represent $30,000–$70,000 of your capital.
Exemptions exist — but they’re specific.
Retirees are not automatically exempt.
Victoria is not abolishing residential stamp duty.
Strategy matters more than shortcuts.
If you’re considering buying property in Victoria and want to understand how stamp duty fits into your bigger financial picture, speak with 360 Financial Strategists before you sign a contract.
A smart property decision should support your long-term financial freedom — not just your settlement date.
Secure your financial future with 360 Financial Strategists—contact us today for personalised mortgage advice and financial planning solutions.
Trauma insurance is often misunderstood, but it’s a vital part of a strong financial safety net. A diagnosis of a serious illness or a major injury can be life-changing, and the financial stress that comes with it can make a difficult time even harder. This comprehensive guide will cut through the jargon to explain exactly what trauma insurance is, who it’s for, and how to find the right policy for your circumstances. We’ll provide transparent, unbiased information to help you make a confident decision for your future.
Trauma insurance is also known as critical illness or recovery insurance. It pays a tax-free lump sum if you are diagnosed with a specific medical condition or suffer a severe injury listed in your policy’s Product Disclosure Statement (PDS).
Q: What exactly is trauma insurance?
A: It’s a lump-sum payment that’s paid directly to you upon a confirmed diagnosis of a covered illness or injury. Unlike other types of insurance, the payout isn’t tied to your ability to work or your recovery from the condition. It’s designed to give you a financial buffer to use however you see fit.
Q: How is it different from other insurance?
A: This is a key point of confusion. Below is a clear comparison:
Trauma Insurance – Lump sum on diagnosis
Medical expenses, paying off debt, home modifications, or time off work.
Income Protection – Regular monthly payments
Replaces a portion of your income if you can’t work due to illness or injury.
TPD Insurance – Lump sum (often via super)
Paid if you are totally and permanently disabled and cannot work again.
Life Insurance – Lump sum on death
Paid to your beneficiaries if you pass away or are diagnosed with a terminal illness.
Q: How does it work?
A: The process is straightforward. First, you receive a diagnosis from a medical professional. If your condition meets the detailed definition in your policy, you lodge a claim. Once approved, the insurer pays the full lump sum directly to you.
Policies vary widely in the number of conditions they cover, so it’s vital to understand the definitions.
The “Big Four”: Cancer, Heart Attack, Stroke, and Coronary Artery Bypass Surgery. These account for the majority of trauma claims.
Other Major Events: Major head trauma, severe burns, loss of limbs, kidney failure, major organ transplants, and paralysis.
Partial Benefits: Many policies offer partial payouts for early-stage conditions, such as certain early cancers, angioplasty, or loss of sight in one eye.
This is where expert guidance is invaluable. Insurers use very specific medical definitions.
For example:
A cancer diagnosis may require histological confirmation and a specific stage.
A heart attack may require proof of irreversible heart muscle damage via blood markers and ECG changes.
Common exclusions include:
Self-inflicted injuries or illnesses
Undisclosed pre-existing conditions
Illnesses or injuries occurring during the qualifying period (often the first 90 days)
Conditions not explicitly listed in the PDS
Mental health conditions (generally excluded from trauma insurance)
Ask yourself:
Could you cover major medical costs?
According to the Australian Institute of Health and Welfare, average health expenditure is $9,597 per person, roughly equivalent to an average monthly income.
Would a serious illness stop you from working?
Do you have significant debts (mortgage, loans, credit cards)?
Do you have dependents who rely on your income?
Do you have at least 12 months of living expenses saved?
Trauma Cover for Children
Child trauma cover can be added to a parent’s policy. It provides a lump sum if a child is diagnosed with a covered condition and can be used for unpaid time off work, medical gaps, or travel and accommodation.
Commonly covered conditions include childhood cancers, severe burns, meningitis, and major head trauma.
Mental Health and Trauma Insurance
In Australia, trauma insurance generally does not cover mental health conditions.
If mental health is a concern, Income Protection insurance is typically the appropriate solution, as it can provide ongoing income if you’re unable to work due to a mental health condition.
Step 1: Contact Your Insurer
Notify your insurer or adviser as soon as you receive a diagnosis.
Step 2: Complete the Claim Form & Gather Documents
You’ll usually need:
Certified photo ID
Certified birth certificate
Medical Attendant’s Statement
Medical reports, test results, and hospital records
Step 3: Assessment
The insurer assesses whether your condition meets the policy definition and may request additional medical confirmation.
Step 4: Payout
If approved, the lump sum is paid directly into your bank account.
In 2024, Sarah, a 35-year-old marketing manager, was diagnosed with aggressive breast cancer. Her trauma policy paid $200,000, allowing her to stop work, cover medical gaps, hire home help, and focus entirely on recovery—without financial stress.
TAL Australia
Claims Accepted Rate (2024): 81.6%
Average Claim Time: 1.5 months
Key Features: Paralysis Support, Child Cover, Inflation Protection
NobleOak
Claims Accepted Rate (2024): 96.0%
Average Claim Time: 1.4 months
Key Features: Stand-alone or combined cover, 33+ conditions
Zurich Australia
Claims Accepted Rate (2024): 86.2%
Average Claim Time: 1.6 months
Key Features: 169-condition coverage, multi-claim functionality
All data sourced from ASIC/APRA public reports.
Trauma insurance isn’t about expecting the worst—it’s about being prepared so you can focus on recovery and life.
Ready to find the right policy? Contact us today to speak with a certified insurance specialist for a tailored, no-obligation quote.
What is your most valuable asset? Is it your home, your car, or the money in your savings account? The answer is none of the above.
Your most valuable asset is your ability to earn an income. Without it, every other financial goal—from paying your bills to saving for a home—is put at risk.
An unexpected illness or injury can stop that income in its tracks, leaving you and your family financially vulnerable. That’s where income protection insurance comes in. It’s a financial safety net designed to replace a portion of your income if you are temporarily unable to work.
This guide will demystify income protection, explain its key features, and provide a simple, actionable framework for choosing the right policy and the most effective strategic financial advice for you.
Income protection insurance pays you a regular, ongoing monthly benefit if you’re unable to work due to illness or injury. It’s designed to help you cover essential living expenses such as your mortgage, rent, bills, and groceries while you recover.
It covers:
Illness and injury that prevent you from working
It does not cover:
Unemployment
Redundancy
Uncomplicated pregnancy and childbirth
If your lifestyle depends on your income, income protection is worth considering—especially if you:
Are self-employed or a small business owner (no paid sick leave)
Have significant debt such as a mortgage or personal loans
Are the primary income earner for your family
Have limited savings and couldn’t afford months without income
The income protection market in Australia changed significantly following regulatory reforms that began in 2020. These reforms aimed to make policies more sustainable for insurers and clearer for consumers.
The most important change was the removal of Agreed Value policies for new customers. Today, new policies are issued on an Indemnity Value basis only. While this caused confusion initially, it has resulted in simpler products with clearer definitions.
The maximum length of time benefits are paid for a single claim. Common options include:
2 years
5 years
Up to age 65
Longer benefit periods mean higher premiums.
The time you must wait after becoming unable to work before payments start. Options range from 14 days up to 2 years.
Longer waiting period → lower premium
Shorter waiting period → higher premium
You should ensure you have enough savings or sick leave to cover this period.
Indemnity Value (current standard):
Benefit is based on your income at the time of claim
Best suited for people with stable income
Agreed Value (no longer available for new policies):
Benefit amount was fixed at policy start
Previously useful for fluctuating incomes
Claims related to substance abuse
Injuries sustained during criminal acts
High-risk activities (e.g. skydiving, professional racing)
Normal pregnancy and childbirth
Rehabilitation or retraining support
Superannuation contribution cover (keeps your super growing while on claim)
Myth #1: “Income protection is too expensive.”
Many policies cost less than a few coffees per week for office-based workers. Premiums are also generally tax-deductible, reducing the real cost.
Myth #2: “Insurers always deny claims.”
Most income protection claims are paid. Denials usually occur due to non-disclosure or not meeting policy definitions—not because insurers avoid paying.
Your job strongly influences:
Premium cost
Claim definitions
Coverage eligibility
Office-based roles generally attract lower premiums, while manual or high-risk jobs cost more. Always describe your role accurately—misrepresentation can lead to claim denial.
Notify your insurer or financial adviser as soon as possible.
You’ll typically need:
Completed claim forms (you, employer, doctor)
Medical reports and test results
Proof of income (payslips or tax returns)
Proof of identity
A claims assessor reviews your case. This may take several weeks and could involve additional medical checks.
You can:
Request a formal review
Lodge a complaint with AFCA
Seek legal advice if necessary
Emma – Freelance Graphic Designer
After severe anxiety and depression, Emma’s income protection provided monthly payments so she could recover without financial pressure.
John – Builder
Following a serious back injury, John received benefits for two years while recovering and undergoing rehabilitation—helping him keep his home.
Sarah – Small Business Owner
After an unexpected illness, Sarah’s policy paid monthly benefits, allowing her to hire a temporary manager and keep her business running.
Protecting your income means protecting your future. Use this guide to compare policies or speak with a financial adviser for personalised advice.
The peace of mind that comes with knowing your income is protected is invaluable.
You’re ready to protect your income—your most valuable asset. But with so many options and your own unique circumstances, how do you know you’re making the right choice?
Many guides list features without giving you a clear, actionable plan, which can leave you feeling overwhelmed and uncertain. In the absence of a qualified insurance specialist, this guide walks you through a simple five-step process to help you choose the right income protection policy, ensuring you get the best value and the peace of mind you deserve.
Before choosing a policy, you need to understand what you’re protecting. This step is about getting a clear picture of your financial situation.
Start by calculating your essential monthly expenses, including:
Rent or mortgage
Groceries
Utilities and bills
Any other non-negotiable costs
This amount represents the minimum income you need to replace if you’re unable to work.
Consider how long your sick leave and emergency savings would last if you couldn’t work. This will directly influence your choice of waiting period later.
Actionable task:
Have your monthly budget and savings figure ready before moving on.
This is where you align your personal needs with the most important policy features. These decisions have the biggest impact on both your coverage and your premiums.
The waiting period is how long you must wait after becoming unable to work before benefits begin.
Longer is cheaper: Waiting periods of 90 days or more significantly reduce premiums.
Shorter is safer: Shorter waiting periods (e.g. 30 days) are better if you have little savings or sick leave.
The benefit period determines how long payments last.
Short-term (2–5 years): More affordable and suitable for injuries with a clear recovery timeline.
Long-term (to age 65): More expensive but essential for long-term or permanent disabilities.
Indemnity Value: The standard for all new policies. Benefits are based on your income at the time of claim—ideal for stable salaries.
Agreed Value: No longer available for new policies. Previously designed for fluctuating incomes with a pre-agreed payout amount.
Actionable task:
Choose a waiting period and benefit period that align with your financial comfort level.
Premiums vary widely and are influenced by personal factors and policy structure.
Age and gender: Premiums generally increase as you get older.
Smoking status and health: Smokers and certain medical conditions attract higher premiums.
Stepped premiums: Start cheaper but increase each year as you age.
Level premiums: Higher initially but rise much more slowly over time.
Inside Superannuation
Pros: Premiums paid from super, often cheaper due to group rates.
Cons: Fewer features, reduced flexibility, erosion of retirement savings, and potentially longer claim times.
Outside Superannuation
Pros: More customisable policies and features; premiums generally tax-deductible.
Cons: Paid from after-tax income, affecting cash flow.
Actionable task:
Compare inside vs outside super to determine what best suits your situation.
Understanding the fine print helps avoid surprises at claim time.
Your job significantly affects premiums and coverage. High-risk occupations often have higher costs or specific exclusions. Always be truthful on your application.
You are legally required to disclose pre-existing conditions. Non-disclosure is a common reason claims are denied.
Genetic testing is a complex area. While there is an industry moratorium on using genetic test results below certain policy limits, professional advice is strongly recommended.
Most policies exclude:
Criminal acts
Self-inflicted injuries
Substance abuse-related claims
The real value of income protection is a successful claim.
Contact first: Notify your insurer or financial adviser immediately.
Prepare documents: Medical reports, proof of income, and claim forms.
Understand timeframes: Claims assessments can take weeks.
If denied: Request a review, lodge a complaint with AFCA, or seek legal advice.
Choosing the right income protection policy doesn’t have to be overwhelming. By following this step-by-step process, you can confidently select cover that’s tailored to your circumstances and protects your most valuable asset.
You’ve done the hard work of understanding your needs. The next step is taking action and putting the right protection in place.
The thought of an unexpected death is never easy. In the midst of emotional distress, the last thing you want is for your loved ones to be left with a financial burden. This is where term life insurance—often called death cover—plays a critical role.
Term life insurance is more than just a financial product. It’s a promise to protect your family’s future and provide clarity and stability during the most difficult times. This guide offers authoritative, unbiased information combined with practical advice to help you understand Australian term life insurance and make informed decisions with confidence.
Term life insurance pays a lump sum to your nominated beneficiaries or estate if you pass away. Most policies also include a terminal illness benefit, which pays out if you’re diagnosed with a life-limiting illness with a limited life expectancy.
The payout can be used for any purpose your loved ones need, including:
Paying off a mortgage
Covering school fees
Managing everyday living expenses
Funding funeral costs
For many people, life insurance is less about policy wording and more about peace of mind. It ensures your family can maintain their lifestyle and focus on healing—without the added stress of financial uncertainty. This reassurance is often the greatest value of a comprehensive policy.
Life insurance is often bundled or confused with other forms of personal insurance:
Total and Permanent Disability (TPD) Insurance
Pays a lump sum if you become permanently disabled and are unlikely to return to work.
Trauma Insurance
Provides a lump sum if you’re diagnosed with a serious illness such as cancer or suffer a major injury.
Income Protection Insurance
Pays a regular monthly benefit if you’re temporarily unable to work due to illness or injury.
Unlike accidental death cover, term life insurance pays out for death caused by illness or disease, not just accidents.
The amount of cover you need depends on whether others rely on you financially. If you have a partner, children, or significant debt, life insurance is an essential part of your financial plan.
If you have no dependents, you may not need life insurance and could instead focus on cover like TPD or trauma insurance.
A practical approach is to compare what your family would need against what they would already have, such as:
Superannuation balances
Savings and investments
Existing insurance cover
Key expenses to consider include:
Mortgage and debts
Living expenses
Education costs
This helps determine the lump sum needed to maintain your family’s standard of living.
When applying, insurers assess factors such as:
Age and occupation
Medical and family history
Lifestyle factors (e.g. smoking)
You are legally required to take reasonable care not to misrepresent information. Incorrect or incomplete disclosure can lead to cancelled cover or denied claims.
Premiums typically increase over time due to:
Age-related risk
Medical inflation
Broader regulatory and economic factors
Even policies once marketed as “level” premiums are not guaranteed to remain fixed. This makes regular policy reviews essential to avoid becoming underinsured.
Life changes—and your policy should too. You may manage costs by:
Reducing the sum insured
Removing unnecessary features
Declining CPI indexation (noting this may reduce real cover value over time)
To make a claim, you’ll generally need:
A completed claim form
Medical documentation or a death certificate
Supporting identification documents
Claims can be lodged directly with the insurer or with the help of a financial adviser.
Although most life insurance claims are paid, declines may occur due to:
Non-disclosure of medical or lifestyle information
Policy exclusions
The claim not meeting policy definitions
Claims can be delayed due to administrative issues, such as repeated document requests or trustee involvement (for policies held in super). Having an adviser advocate on your behalf can significantly reduce stress and delays.
Inside superannuation:
Proceeds are non-estate assets and governed by superannuation law and trustee discretion.
Outside superannuation:
Benefits are paid directly to nominated beneficiaries, usually tax-free, without trustee approval.
Binding nominations: Legally enforceable but usually expire after three years.
Non-binding nominations: Trustee retains discretion, which can cause delays.
Only dependants or your legal personal representative can usually receive super death benefits.
Retail policies allow you to nominate anyone, with faster payouts and fewer restrictions.
Business owners often need additional cover, such as:
Key Person Insurance
Buy–Sell Insurance
These policies help protect the business if an owner or critical employee dies or becomes disabled.
Life insurance can still be useful later in life, particularly for:
Funeral expenses
Outstanding debts
Term life is typically the most accessible option, though entry age limits apply.
DIY: Suitable for simple situations with no dependents or debt.
Professional advice: Essential for complex needs, business ownership, pre-existing conditions, or structuring cover efficiently.
An adviser can help ensure you’re neither underinsured nor paying for unnecessary features.
Life insurance isn’t just about money—it’s about certainty, dignity, and protecting the people who matter most. Taking the time to structure the right cover now can make all the difference when it matters most.
Secure your financial future with 360 Financial Strategists.
Contact us today for personalised insurance advice and strategic financial planning.
Life insurance isn’t just about financial security—it’s about peace of mind. Here are some key reasons to consider it:
If your loved ones depend on your income, life insurance can replace that financial support. This is particularly crucial for families with young children, spouses, or adult dependents who might struggle to maintain their standard of living without you.
Even if you don’t have significant assets, life insurance allows you to create an inheritance for your dependents. With the help of financial experts, you can leave behind a financial legacy.
Life insurance can cover more than just daily expenses. It can also help pay off significant debts like mortgages, car loans, and credit card balances. Additionally, it can ease the burden of funeral costs, which can range from $4,000 to $14,000.
While no amount of money can replace a loved one, life insurance offers reassurance. Knowing your family will be taken care of financially can provide a sense of security during uncertain times.
Life insurance isn’t a one-size-fits-all solution. Different policies cater to different needs:
Life insurance becomes essential at various stages of life, particularly when you take on responsibilities or financial obligations. Consider getting life insurance when:
Even if you don’t yet have dependents, getting life insurance early can save money. Premiums are often lower when you’re younger and healthier, as most insurers require a medical check to determine your rates.
The amount of life insurance you need varies depending on your financial situation and life stage. Here’s how to calculate it:
Keep in mind that your insurance needs will change over time. For example, a 22-year-old with no dependents may only need enough to cover funeral expenses, while a parent with a mortgage and young children will require much more. As your children grow, your debts decrease, and your superannuation builds up, you may need less coverage.
Life insurance is more than a financial product—it’s a safety net for your loved ones and a way to plan for the unexpected. Whether you’re just starting out or reassessing your needs, understanding your options and getting the right coverage is crucial.
If you’re unsure where to start, consult with a life insurance provider, broker, or financial adviser. They can help you navigate the complexities and tailor a policy that suits your needs and budget.
To learn more about financial security, speak to our qualified team of financial planners and wealth creation experts. Contact us online or call us on 03 9427 0855.
Source: NAB
Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://www.nab.com.au/personal/life-moments/family/life-insurance
National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.
© 2022 National Australia Bank Limited (“NAB”). All rights reserved.
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With income protection insurance, you can be paid some 70 per cent of your income for a specified period to help when you cannot work.i
The most common claims are for illnesses such as cancer, heart attack, anxiety and depression.ii Payments generally last from two to five years although you can take a policy up to a certain age, such as 65, and the amount is generally based on 70 per cent of your income in the 12 months prior to the injury or illness.iii
For some, income protection insurance may be part and parcel of your superannuation although more commonly this is limited to life insurance, and total and permanent disability cover. But, if you do have income protection insurance in your super, check the extent of the automatic cover as it can be modest.
Alternatively, you could take out a policy outside super where you will enjoy tax deductibility on the premiums. Income protection insurance is the only insurance that is tax deductible. Other life insurance products outside super such as trauma insurance are not tax deductible.iv
There are many considerations when looking at income protection insurance and the best place to start is to work out your budget, thinking about how much would you need to maintain your family’s lifestyle if you are unable to work. Then you are able to decide on the appropriate level of income protection insurance as well as other factors that affect premiums such as how quickly you might need the payments to start and how long these payments will last.
Many people think income protection insurance is expensive, but you can fine tune policies to suit your budget by changing the percentage payment amount, the length of time for which you would receive the payment and how soon you start getting a payment once you cannot work. Reducing these parameters can reduce your premiums.
It is important to be mindful of a number of factors that might affect the success of any claim you might make. So, make sure you read the product disclosure statement.
Every insurer has a different definition as to what will trigger a payment, so you need to understand the difference between “own occupation” and “any occupation” for cover. For example, if you are a surgeon and lose capacity in one of your hands, you will receive a payout from your insurer if you have specified “own” occupation because you can no longer work as a surgeon. But if you opt for “any” occupation, then the insurer could argue that you could still work as a doctor just not as a surgeon and the claim may not be paid.
It is also wise to understand that if your policy does not seek your medical history, it is likely there could be limitations to what illnesses are covered.
Another consideration is whether you have stepped or level premiums. Stepped premiums start low and usually increase as you age. Level premiums begin at a higher rate but typically don’t increase until you reach 65. In the long run, level may work out cheaper for some.v You must work at least 20 hours a week to take out income protection insurance and you can usually only buy a policy up to the age of 60. Also, if you receive a payout, you need to declare that income on your tax return.
If you want to check that you have sufficient cover to protect you and your family should you lose your income, then give us a call to discuss.
i Income protection insurance | Moneysmart ( moneysmart.gov.au)
ii The Most Common TPD Claims in Australia with Examples | Aussie Injury Lawyers
iii Income protection insurance | Moneysmart ( moneysmart.gov.au)
v Income protection insurance | Moneysmart ( moneysmart.gov.au)
Choosing between stepped vs. level premiums can feel overwhelming. These payment options have their own pros and cons, and it’s important to pick the one that suits you best. In this guide, we’ll explain the differences between stepped and level premiums in simple terms.
Whether you want predictable costs, long-term savings, or flexibility, understanding these options will help you make the right choice for your insurance coverage.
These days, many people have life insurance in their super account. It’s a good safety net, but often, the amount of cover isn’t enough. A study by Rice Warner in 2020 showed that life insurance in super only covers about 65-70% of what people really need.
Since Covid, this number has gone up. It’s crucial to have the right amount of life insurance, whether it’s in super or not. You should check it regularly as your situation changes. What if something unexpected happens? How would your family manage? Would they be able to pay the mortgage or school fees?
Life insurance is a key part of your financial plan, but there are different ways to pay for it, which could save you money.
The money you regularly pay for life insurance is called premiums. You can pick either a stepped premium, a level premium, or a mix of both.
With a stepped premium, you pay more each year. But with a level premium, you pay about the same every year.
At first, stepped premiums are cheaper. But over time, they can end up costing more than level premiums. Ironically, when you might think of canceling your policy because it’s getting too expensive, it’s probably when you need the insurance the most. This is usually when you have lots of expenses like a mortgage, childcare, or school fees.
Level premiums start higher but usually don’t change much over time. They might go up if your policy is linked to inflation or if you want more coverage.
If you get life insurance when you’re young, the payments are usually lower. This goes for both stepped and level payments.
Let’s say you’re a guy who doesn’t smoke and you want $1 million of life insurance. If you start the policy when you’re 30, a level payment is about 60% more expensive than a stepped payment at first. But if you start when you’re 40, it’s 120% more, and if you start when you’re 50, it’s 170% more.
But eventually, there’s a point where a level payment saves you a lot of money. This is especially true if you keep the policy until you’re 65.
If you start the policy at 30, you’ll start saving money after 23 years. If you keep it until you’re 65, you’ll save about $58,700 over 35 years. If you start at 40, you’ll save about $46,000, and if you start at 50, you’ll save about $10,000. But saving $10,000 is still good.
There are a lot of reasons why you might pick a level payment, especially because it helps you know exactly how much to budget.
But for many people, starting with cheaper payments can make stepped payments more attractive. Also, if you only plan on having life insurance for a short time, like until your kids are grown up or your mortgage is paid off, stepped payments might be better.
Some insurance companies can give you a mix of stepped and level payments, which could help with your money situation.
Count on financial advisors to help you choose the best premium option for your needs. A financial advisor can guide you in making the right financial decisions.
To find out if our strategies are right for you, feel free to contact 360 Financial Strategists online or on 03 9427 0855.
Many superannuation funds provide insurance options such as life, total and permanent disability (TPD), and income protection for their members. When assessing your insurance coverage, it’s crucial to examine whether your super fund includes these benefits.
Take the time to compare these offerings with life insurance through super options available outside of super to ensure you secure the most suitable policy for your needs.
Superannuation funds commonly offer three types of life insurance options for their members:
Most super funds automatically include life cover and TPD insurance for their members, with some also offering income protection insurance. Typically, these insurances are provided without the need for medical checks and cover a specified amount.
In super, TPD insurance coverage often ceases at age 65, while life cover typically ends at age 70. Conversely, outside of super, coverage usually continues as long as premiums are paid.
As per legislation, insurance on inactive super accounts—those without contributions for at least 16 months—will be automatically canceled by super funds. Additionally, individual super funds may enforce their own regulations, requiring insurance cancellation on accounts with insufficient balances.
Your super fund will notify you if your insurance is nearing expiration.
To maintain your insurance through self-managed super funds, you must inform your super fund or contribute to the respective super account.
You may consider retaining your insurance if you:
If you’re a new member of a super fund under the age of 25, or if your account balance falls below $6000, insurance coverage may not automatically be provided unless:
In the event your balance dips below $6000 and you already have insurance, typically, you won’t lose your coverage.
Utilize the Life Insurance Calculator to assess whether life insurance through your super is necessary and determine the appropriate coverage amount.
Navigating superannuation and insurance can be intricate. For assistance, reach out to your super fund or consult with a financial adviser.
Before switching super funds, it’s crucial to review your insurance coverage, particularly if you have pre-existing medical conditions or are over the age of 60, as obtaining desired coverage may not be guaranteed.
To ascertain your life insurance through super funds, you can:
Upon examination, you’ll discover:
Your super fund’s website typically hosts a comprehensive PDS elucidating the insurer’s identity, coverage details, and claim procedures.
If you maintain multiple super accounts, you might be paying premiums for numerous insurance policies, which could diminish your retirement savings. Assess whether consolidating your policies into a single fund suffices or if additional coverage is necessary.
When reviewing your superannuation insurance, scrutinize for any exclusions or premium loadings. Loadings denote a percentage increase on the standard premium, often applied to individuals deemed higher risk due to factors such as occupation, pre-existing medical conditions, or smoking status.
Should you suspect an erroneous classification by your super fund, promptly notify them to rectify the situation, potentially saving on unnecessary insurance expenses.
Count on financial advisors to manage your life insurance and super funds! A financial advisor can guide you in making the right financial decisions.
To find out if our strategies are right for you, feel free to contact 360 Financial Strategists online or on 03 9427 0855.
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