This means that in the event of  serious accident, disability or death, that their families income would halve if they were no longer able to work any more.

Its a sobering thought, but this means that 1 in 5 Australian parents wouldn’t be able to care for their family with secure financial support if an accident happened to them.

The report was based on a study of working families in Australia, and an analysis of the report reccommended that families look closely at their financial positions and work out a financial strategy for the event of a misfortune.

Life insurance is one way that your family can be financially prepared for an accident if one happened to you. In the tragic event of a death or accident, the last thing that a family needs is financial strain.

Chris Pearce, the shadow minister for financial services, superannuation and corporate law, said that the personal effects of a death in the family can be exacerbated by financial worries if a family member does not have an adequate level of life insurance cover.

“Millions of hardworking Australian families are seeking to build wealth in order to fund lifestyles both this side- and perhaps more importantly- on the other side of the day they choose to retire,” Mr Pearce said. “An accident, injury, illness or death, can have a dramatic impact on the financial security of an individual or their family. These financial consequences often compound the emotional or physical trauma experienced.”

Statistics from the Investment and Financial Services Association (ASFA) showed that in 2008, more than 13,000 families received the average life insurance payout of $91,000, whilst the average family with young children had debts of $167,000. These statistics show that financial difficulty would be extremely hard for a family to avoid in this situation.

1300 Insurance has life insurance consultants available who are able to discuss options of cover that is available to you and your family in the event of a tragedy.

Source: www.lifewise.org.au

Depending on the cover you elect to receive, Life Insurance can cover you and your dependents in the event of death, disability or long term injury. It’s important to consider Life Insurance as part of your financial plan, as it can cover you and your family against possible exposure to financial hardship in an unexpected event.

Through their website, ASIC has offered some of the following tips when looking at life insurance policies.

* Discuss life insurance with your family and partner

* Don’t just insure the highest income earner in your household

* Decide how much cover you need (there are various Life Insurance policies available, all with different levels of cover and cost)

* Read the Product Disclosure Statement carefully, which describes the product, its benefits, and any limitations as well as fees and charges.

Overall, when purchasing a Life Insurance product, it’s important to feel comfortable with the policy you have selected and to be confident that the policy meets your needs.

After all, as with all financial planning, life insurance can be seen as an investment in the future of your loved ones.

Life insurance sales in Australia jumped nearly 6% in Q4 2008, according to preliminary figures from research house Plan for Life. And an Australian insurer reports a 25% rise in its sales for Q1 2009, compared to Q1 last year.

And with more policies being sold, more jobs are being created. “There’s been a 100% increase in available roles compared to this time last year. This uptake really began in Q4 of 2008 and it’s been mainly growth hires,” says Sarah Wapling, a practice leader at Link Recruitment.

Australians are feeling the need to insure their wealth given the current economic environment. This has resulted in an increase of life insurance sales.

Source: www.efinancialcareers.com.au 20 April 2009

Few people die at home in Australia today. So, most of the time the hospital or other authorities are there to take care of the medical necessities and formalities.

When someone dies at home, you should phone the person’s doctor. The doctor will explain what steps to take to get a Death Certificate.

• Death Certificate
• Organising the funeral
• Insurance policies
• Funeral bonds and prepaid plans
• The Will.

Death Certificate

A Death Certificate is the official registration of death. It is signed by the doctor who pronounces the death and must be lodged with the relevant State or Territory Government office. You cannot make funeral arrangements without a signed Death Certificate. In most States and Territories, this office is called the ‘Registrar of Births, Deaths and Marriages’. Your funeral director will usually organise to lodge the Death Certificate for you.

A copy of the Death Certificate for the next of kin is usually arranged by the funeral director – this may take several weeks. In unusual cases, for example if an autopsy or coronial inquiry is conducted, it could take eight weeks or longer to issue the Death Certificate.

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Organising the funeral

A funeral director can arrange the funeral for you. They will arrange for the body to be removed from the place of death, certificates for the burial or cremation service and can arrange for you to view the body if you wish. The funeral director can also arrange other things like newspaper notices, flowers and religious services. If you do not know who to contact, the Funeral Director’s Association in your state or territory can help.

Funeral costs can vary considerably. It is important to know what you’re getting and how much it will cost. Do not be persuaded to spend more than you can afford. The funeral director should provide a quote in writing.

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Insurance policies

1300 Insurance has a smile, easy and affordable low cost solution – funeral insurance from as little a $0.36 cents a day and will cover funeral expenses up to $15,000.

Sometimes private health insurance, sickness and accident insurance or life insurance policies may pay funeral and other payments. For example, a few private health insurance companies contribute amounts up to around $1 500 towards the cost of a funeral. The contribution depends on the level of cover and certain conditions.

Conditions may include:

• your relationship to the person who has died
• the length of time he or she had the cover
• whether a health condition that contributed to the death had existed before joining.

Please Note: If you find out the person who died had any insurance like this, phone the insurance company and ask if there is any payment available.

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Funeral bonds and prepaid plans

If you think there was a prepaid funeral or funeral bonds, but cannot find the relevant papers, the papers may have been left with someone responsible such as next of kin, a solicitor, the Public Trustee, a trusted friend or the executor of the Will. You can also phone the local funeral directors. They usually have their own lists that you can check. Look for the number under ‘Funeral Directors’ in the Yellow Pages.

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The Will

The Will is a legal document that sets out how the deceased’s belongings are to be distributed after their death. It may take into account:

• the likely value of their estate
• special funeral arrangements
• prepaid cemetery plots
• beneficiaries and special gifts
• organ donation
• appointing an executor.

The executor of the Will is responsible for distributing the person’s assets to the people named in the Will as beneficiaries. This happens after any debts are paid.

If the person has not left a Will the estate is shared under a formula set by law. The formula cannot take account of the person’s wishes.

If there are no close relatives, there is a chance the estate could be paid to the State or Territory Government.

The administration of the estate may be more difficult and expensive if there isn’t a Will. The State Trustee, Public Trustee or a solicitor can give you advice on what to do in these circumstances.

Depending on the State or Territory, there may have to be a ‘grant of probate’ if the estate is more than $10 000. This means having a court order that says the Will is the final and valid Will of the person who has died.

Article taken from ATO website 26/3/09

Angela and Paul have just married and bought their first home, as a couple their financial responsibilities have increased considerably and Paul knows that as the main income earner Angela would not be able to meet the mortgage repayments if he was no longer able to work or passed away. Therefore, he is considering both life insurance and income protection insurance, which will give him and his wife peace of mind as well as guaranteeing their continuity of life.

While Angela and Paul’s circumstances is one that warrants income protection and life insurance cover there are many others that are also feasible, these include:

1. A single person wishing to cover their financial obligations.
2. Partners who are not legally married but hold joint assets and liabilities.
3. Partners or married couples with children under the age of 18.
4. Retired couples or individuals.
5. Self-employed contractors or business owners who may be either single or within a relationship.

So how do you work out how much cover you will need?

The easiest way to calculate this is by looking at your circumstances and taking all of your costs into consideration. If you are looking at income protection work out how much you need weekly to pay for your expenses and cost of living. Include car and home repayments, utilities and other bills as well as food and expenses. For example – if you earn $800 a week after tax whilst working it is best to replicate this amount.

In terms of life insurance consider the cost of paying out your mortgage and any other loans that you may have, cover funeral expenses and if you have a family leave them enough to live on for at least 12 to 18 months while they adapt to their new lifestyles.

When looking at life and income protection policies it is important to consider-
1. The cost of the premium and methods of payment?
2. What exactly are the fees and charges?
3. Exactly what your policy covers in terms of illness and death?
4. What are the policy terms and conditions are?

It is important to consider where you are buying your insurance policy. 1300 Insurance offers coverage direct to the public without the intermediary broker or financial adviser. This amounts to cheaper premiums because of the lower costs involved. Be sure to compare the premiums on offer.

Most of the time, life insurance and income protection premiums are calculated according to the risk to the insurer, therefore factors like previous illness, disabilities, family medical history, your age and your occupation play a large role in determining cost, as does whether you smoke and drink alcohol.

Life insurance is typically offered via financial planners and life insurance brokers and choosing the right broker or planner can be difficult, remember that you will need to genuinely like this person because they will need to know your financial background and personal history in order to offer you the best policy.

1300 Insurance has set out to make buying insurance cover as convenient and cost effective as possible. By removing the middle man the 1300 Insurance experience is inviting and non-intrusive, with the added bonus of being very cost effective.

Article extract from Webwombat 24/03/09

IF YOU fit the description of “married, kids and mortgage”, how much life insurance might you need?

Life insurance places an economic value on the person who has died, says Mark Kachor, the managing director of research firm DEXX&R.

The theory is that it should replace the income the person would have earned, so their dependants are left no worse off than if the person had lived a full life.

That money should pay out all debt – money borrowed on the basis that it could be repaid out of that person’s income – and in a city such as Sydney or Melbourne that might involve a $500,000 mortgage.

Now add the children. Their upkeep might come to $20,000 a year for 10 years – each.

And that’s before optional extras such as private school fees. Then there’s the actual income loss. If the person was earning about $80,000 a year you’d need to earn about 7 per cent a year on a capital sum of $1.1 million to replace that income, Kachor says.

The idea is to keep that capital sum intact, rather than drawing on it, as a guard against inflation and perhaps to replace the retirement savings the person would otherwise have accumulated, he says.

“You end up with $2 million in cover as the economic value of someone 30 to 40, married, with a couple of kids and a mortgage,” Kachor says. “If you’ve got that level of cover, you’re fully insured.”

Source: www.smh.com.au March 4, 2009

There are a range of new providers entering the market offering products direct to the retail consumer, where previously they had to be bought through brokers of financial planners. “The access to information and advice has never been easier or cheaper for the consumer” Read says.

APRA statistics show that the Australian Life insurance industry managed over $250 billion in assets last year, receiving a total of $51.6 billion in annual premiums.

The level of under-insurance for Australians is substantial, providing huge upside growth potential for the industry.

Read mentions several factors as having contributed to the level of under-insurance in Australia “The application process for ordinary life insurance stands as an obvious barrier for consumers”. “Often a time consuming paper based application, involving a financial planner and or broker, obtaining a statement of advice and perhaps a medical, comes at significant expense, paid either directly or indirectly by the consumer. Most people are reluctant to endure this, and the idea ends up in the too hard basket. If it’s not the application process that puts us off it’s the perception – “I’ve got Life insurance via my superannuation fund, so I’m covered”. Which can be interpreted as a lack of appropriate financial advice”.

1300 Insurance statistics indicate they are likely to be significantly under-insured.

Studies by Rice Walker Actuaries estimate the average insurance amount payable from superannuation is only $70,000. 6 out of 10 parents with dependent children lack enough cover to support their family for more than just one year if they died. For those with the average superannuation death cover, the amount represents less than 20% of their needs.

Source: PRLog 6/3/09

90% of this market is accounted for by life insurance held with-in Superannuation funds; the remainder is ordinary life insurance business ($5.22 billion in annual premium). Most people purchase their life cover via their super fund for 2 main reasons; tax effectiveness and ease of application. The significant limitation with this type of life insurance is the level of cover offered. Studies by Rice Walker Actuaries estimate the average insurance amount payable from superannuation is only $70,000. 6 out of 10 parents with dependent children lack enough cover to support their family for more than just one year if they died. For those with the average superannuation death cover, the amount represents less than 20% of their needs.

Its established that the Life insurance market in Australia is huge by any comparison, and the level of under-insurance for Australians is substantial, providing huge upside growth potential for the industry. A recent study by Tower Australia forecast market growth in excess of 13% each year until 2018.

In considering the factors that have contributed to this level of under-insurance, the application process for ordinary life insurance stands as an obvious barrier for consumers. A time consuming paper based application, involving a financial planner and broker, obtaining a statement of advice and perhaps a medical, comes at significant expense, paid either directly of indirectly by the consumer. Most people are reluctant to endure this, and the idea ends up in the too hard basket.

If its not the application process that puts us off its the perception – “I’ve got Life insurance via my superannuation fund, so I’m covered”. Which can be interpreted as a lack of appropriate financial advice. As the statistics indicate they are likely to be significantly under-insured.

The question is; what upside is there for a company that offers easy to find easy to use Life insurance products available online or over the phone? With the ability to offer instant quotes on various different life insurance products, with an easy application process with no paperwork or medical? If that company can offer improved pricing that reflects the low input process? What if that company can go one step further and offer the consumer free, fully interactive advice and a compliant statement of advice over the Internet, telling them what level of cover they actually need and what products suit them best? A product that is currently unlike anything offered in the market.

1300 Insurance and DiY Insurance – Watch this space!