Wealth Protection with Personal Insurances

Suppose you had an illness or accident -
what would that do to wealth creation strategies?

It is natural for people to focus on the investment side of financial planning, however this is only a part of the planning process.

There is another, equally important side… unless of course you are immortal and immune from any disruption to earning income… If not, then personal insurance protection is a MUST!!

Our model for the place of insurances is summarised in the chart.

Personal insurances fill in the gap between current net assets and assets required at retirement, given a personal’s goals. As net assets increase, the amount of personal insurances can be decreased if goals do not change.

Insurance requirements vary depending a person’s goals and their personal circumstances (e.g. partner and children). The amount of cover needed to protect against a loss in income, to repay debts or to provide for dependants will depend on each individual's circumstances.

There is no 'one size fits all' solution. At Archimedes Financial Planning, we assist clients to make informed decisions of the amounts of up to five personal insurances:

• Term life (provides lump sum in event of death)
• Total and Permanent Disablement (provides lump sum in event of total disability)
• Trauma / Critical Illness (provides lump sum in event of specified medical condition)
• Income Protection (provides ongoing income to replace salary in event of temporary or permanent disability)
• Business Expenses (provides 1 year income to replace small business revenue in event of temporary disability of business owner or a key person).

We also explore the pros and cons of having these insurances within super or outside super.

To select from the multitude of policies from the major insurance companies, we use independent actuarial evaluation in the IRESS software. The most appropriate policy can be identified, given the amount of premium you wish to pay.

In summary, Archimedes Financial Planning assists clients to decide how much of their income is spent on the improving the future (by making investments) and how much is spent in ensuring the future wealth actually occurs (using personal insurances).