We invented a game a while back we called Wealth Protection Roulette. We haven’t played for a while so we thought we’d bring it back. What is it, you ask? Well, the foundations of any sound financial plan are built on ensuring that the major risks in life are covered and that your biggest assets are protected. So, we’re having a look at income protection insurance and other ways of protecting yourself against the real financial consequences of sudden and unexpected tragedy including critical illness or injury or even worse, death. Many people see insuring your life and/or income as a lot like underwear…. both are kind of optional for many people but when something scary happens if you don’t have some of each, things can get messy – really messy…..
To help get your head around it, think of it like a little game – something nice and safe and relatively harmless ,like say, Russian Roulette…. To get you thinking we’ve got some great Bruce McAveney-esque stats (love your work Bruce!!) and we’ll get you to play our own little game in your head as you read along – it’s called Wealth Protection Roulette. For instance, as Bruce probably already knows:
- Every working Australian has a 1 in 3 chance of becoming disabled for at least 3 months before turning 65 1. Line up three of your friends, chances are this will happen to one of you before you turn 65 – which one will it be and what will be the financial impact?;
- 1 in 2 Australians men and 1 in 3 Australian women be diagnosed with cancer by the age of 85 2. Get two or three friends – who will it be? The odds on a game of Russian Roulette are actually probably more in your favour!….;
- Approximately 50,000 deaths were attributed to cardio vascular disease in Australia in 2008. It was responsible for more deaths than any other disease group – 34% in total 3;
- Stroke is Australia’s second biggest killer. Nearly 500,000 Australians will suffer at least one stroke over the next 10 years 4; and
- 1.1 million Australians are disabled long term by heart, stroke and vascular diseases 4.
Let’s not forget that these mind boggling statistics don’t even begin to take into account complications from other accidents which could just as easily have moved from near misses to serious complications. Think for example about getting kicked in the face at sport, falling from your mountain bike or being hit by a car – we all know people who’ve had stuff like that happen to them – some get away with it – others don’t….
So how can we avoid the financial pain?
- Life insurance – provides an agreed lump sum benefit in the event of the death or diagnosed terminal illness of the life insured.
- Total and Permanent Disability Cover (TPD) – provides a lump sum benefit where the insured is permanently disabled and unable to ever return to the workforce.
- Income Protection – provides a monthly benefit of up to 75% of your income in the event that you are unable to work due to illness or accident.
Bottom line, it’s hard to avoid the medical risks associated with the above statistics, and they are real statistics. The fact is, 5 serves of veggies and two serves of fruit a day just won’t be enough to keep all of us healthy and we at iGenWealth know that eating your veggies won’t stop you getting kicked in the face at sport – trust us!…the stats show that playing Russian Roulette just might be safer than getting out of bed in the mornings…. However, you can avoid the adverse financial complications of something going wrong but the longer you wait to get yourself covered, the older you will be and cover may be more difficult, expensive or even impossible to obtain.
We’ve helped clients who were injured or ill and unable to earn an income. We’ve also helped terminally ill clients with estate planning and often their biggest worry is whether there would be enough money to support their partner or family after their death. Often they have insufficient insurance and by the time they are diagnosed with a terminal illness it’s too late to do anything about it. Some of these clients have been as young as their early 30’s and up until they became ill they probably all thought the same as the rest of us – it won’t happen to me….
Think about the stats and look around you, are you really comfortable with the risks you run? You wouldn’t play Russian Roulette. So why play Wealth Protection Roulette? Still think it won’t happen to you?
Want more information? Check out our free wealth protection tool today to find out just how affordable peace of mind can be at:
Wealth information for the iGeneration!
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By Dean Johnson
1 Institute of Actuaries of Australia 2000: Interim Report of Disability Committee
Statistics correct at the date of post.