20 Jul 2023 Podcast: Guest – The Importance of Personal Insurance with Phil Thompson
In this episode, hosts Maddie and Evelyn interview Phil Thompson, a financial planner based in Melbourne, to discuss the importance of personal insurance.
They explore the four main types of personal insurance: life insurance, income protection insurance, total and permanent disability (TPD) insurance, and trauma insurance.
Phil provides insights into the purpose and benefits of each type, emphasising the significance of adequate coverage to safeguard oneself and loved ones financially.
The conversation also covers factors to consider when choosing personal insurance, such as age, health, occupation, dependents, and financial goals.
Listeners gain valuable information to make informed decisions about their personal insurance needs.
Ready to give your personal insurance the attention it deserves? Connect with Phil Thompson and his dedicated team at Skye Financial Services to review and enhance your coverage. They understand the importance of safeguarding what matters most to you.
Website: https://www.skye.com.au/
Instagram: https://www.instagram.com/skye.wealth/
Email: phil@skye.com.au
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You Have My Interest is brought to you by Everlend, a mortgage and finance broking firm built for the purpose of educating and empowering you to make informed financial decisions tailored to your wealth goals. Find out more and book in your free initial consultation at https://www.everlend.com.au/
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Podcast produced with Apiro
Please find a Podcast summary below with the interview highlights:
In this episode of You Have My Interest, host Evelyn Clarke and co-host Maddie delve into the importance of personal insurance with guest Phil from Sky Wealth, a specialist in personal insurance cover. The discussion explores the types of personal insurance, their benefits, and how they intersect with financial goals, especially for property buyers and investors.
Key Points Covered:
Overview of Personal Insurance:
- Types of Personal Insurance:
- Life Insurance: Pays a lump sum to dependents in the event of death.
- Total Permanent Disability (TPD): Provides a lump sum if you’re unable to work permanently.
- Income Protection: Offers a monthly benefit to replace a portion of lost income due to injury or illness.
- Trauma Insurance: Covers specific medical events like cancer or heart attacks with a lump sum.
- Importance: Many people overlook personal insurance, despite its role in safeguarding financial security, especially for property owners or those with dependents.
Benefits and Misconceptions:
- Through Super vs. Financial Advisor:
- Superannuation offers default cover but is limited and may not suit everyone’s needs. Advisors can tailor policies and work with multiple insurers for better outcomes.
- Premiums can often be partially or fully paid through superannuation to reduce out-of-pocket expenses.
- Cost Myths: Personal insurance is often perceived as expensive but can be affordable, especially when structured through superannuation.
- Flexibility: Policies can be adjusted later (e.g., after purchasing property) without complete re-assessment for pre-existing conditions, provided changes are made within specific timeframes.
Practical Advice:
- Income Protection as Priority:
- Seen as the most critical form of insurance because it protects your ability to earn an income, which underpins financial stability and future wealth-building.
- Timing and Reviews:
- Take out insurance early while healthy to avoid exclusions for pre-existing conditions and benefit from lower premiums.
- Regularly review policies to ensure they align with life changes, such as buying property or starting a family.
- Customising Policies:
- Policies can be tailored to cover personal debts (e.g., mortgages) and to suit unique needs like trauma or income replacement during extended illness or disability.
Insurance for Property Owners and Investors:
- Owner-Occupiers: Focus on covering principal residence debt to ensure family security.
- Investors: Typically not necessary to insure investment debt; income protection usually covers cash flow needs for negatively or positively geared properties.
Choosing and Managing Policies:
- Advisor vs. DIY:
- Using an advisor provides access to multiple insurers and ensures policies are set up correctly, with ongoing support for adjustments or claims.
- Direct applications can be limiting, with fewer options and less flexibility if health issues arise later.
- Step vs. Level Premiums:
- Step Premiums: Start lower but increase with age.
- Level Premiums: Fixed over time but cost more initially, suitable for long-term planning.
Phil’s #1 Property Tip:
- Start preparing early, even if property purchase is years away. Speak to a broker to understand and improve your borrowing capacity and financial habits.
Listeners are encouraged to review their personal insurance needs early and regularly to align with their financial and property goals. To learn more, visit Sky Wealth’s website or contact Phil and his team directly.