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Instrat Financial Services Pty Ltd is a corporate authorised representative of:-
Infocus Securities Australia Pty Ltd AFSL No.' 236523.
Your greatest asset is your ability to earn an income, and if that ability is lost through death or disablement, then the financial ramifications can be extremely serious for both family and business, and that's where our Financial Services Department can help protect you against such financial risks. The following is a brief summary of some of our Financial Services Department's area of expertise.
Life Insurance
An important aspect in planning for your retirement and building financial security is to ensure that you are protected against the unexpected. The only way that you can be 100% certain of having a lump sum paid to your loved ones in the event of your death is by having appropriate life insurance.
Term Life Insurance provides a lump sum to your family, should you pass away during the term of the policy.
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Total and Permanent Disability Insurance
You should also consider having total and permanent disability cover, to maintain your family's lifestyle in the event of your disablement. The definition and application of total and permanent disablement varies from insurer to insurer. However, three general variations are applied. The general rule is: the more generous the benefit, the more expensive the cover.
The variations relate to the Insured's inability due to disability to perform:
- their usual or own occupation
- an occupation for which they are qualified by reason of education, training and experience.
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Trauma Insurance
With the remarkable advances in modern medicines, more and more people are now surviving major traumas such as heart attack, cancer, coronary artery surgery, etc. However, the recovery period and the cost of care associated with such illnesses normally places extreme financial strain on the person suffering the illness.
For this reason a relatively new form of insurance has recently been developed. Known as ‘Trauma Insurance', ‘Crisis Care' or ‘Dread Disease' this insurance pays a lump sum to the insured person upon diagnosis of one of a number of specified conditions. Such a payment will assist you and your dependants to be financially secure. While the payment may be used in any way you like, you may wish to pay for medical expenses not covered by Medicare or your health fund, to clear any liabilities you may have, or to take care of bills and expenses.
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Income Protection
As our income is generally seen as our greatest asset, it is extremely important that this asset is protected. Income Protection is designed to replace income in the event of illness or accident, which means less strain on savings, investment income and other assets.
The maximum permissible cover is typically 75% of your personal exertion income (including salary sacrificed superannuation contributions). It is extremely important that any income protection policy recognises and covers your applicable employment structures and circumstances.
Benefit periods for this type of insurance vary and alter the premium of policies. Typical benefit periods range from 1 year, 2 years, 5 years, to age 55, to age 60, to age 65, to age 70, and Lifetime.
The waiting period before benefits are paid will also alter the premium for income protection insurance. A short waiting period is generally designed to suit those who could be in financial difficulties very quickly if their income stream stops. Your sick leave and annual leave entitlements should be taken into account in deciding the appropriate waiting period.
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Key Person Policies
Most businesses have at least one “Key Person”, a person who is integral in running the business. A Key Person could be the business owner, a general manager, the top sales person or anyone else that the owner of the business identifies as a Key Person. What you have to ask yourself, is what would happen to my business if a Key Person becomes totally incapacitated, has a heart attack, gets cancer or in the worst case dies? The business could be in dire straights if a Key Person is out of the business.
What are the options a business has if any of the above were to occur? A Term Life, TPD or Trauma type policy could be structured in a way to be a Key Person policy. The Business would receive the insurance company pay out and the funds can be used to pay overheads, find a replacement for the Key Person or whatever the business owner feels the money is needed for. The Key Person policy needs to be structured in the appropriate way and the payment of the policy needs to be structured as well so that all tax implications, including deductions, FBT and income tax are taken into consideration.
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Buy and Sell Agreements
Most business owners have worked extremely hard in starting up and continuing to run their business. They put in many long hours and have made their business a success. What would a business do if the Business Owner or one of the Business Owners were to die, become totally disabled or were to have a heart attack or get cancer etc? What would happen to the ownership of the business in this case?
For example, if there is a business with two shareholders and one shareholder dies, what happens to the deceased shareholders share of the business? It could simply pass on to the deceased shareholders spouse, children or relative. But what would the deceased shareholder want to happen? What would the still living shareholder want? In many instances the still living shareholder would want to “Buy” out the deceased shareholders share, but how would they do this? They could borrow the funds from a bank, they could pay in cash or they could have the proceeds of an Insurance Policy pay for the shareholding. The insurance company would pay the money to the deceased shareholders estate and that would then release the deceased shareholders share to the still living shareholder.
Term Life, TPD and Trauma policies can be structured in a way to be set up as Buy and Sell Agreements. Policy ownership, premiums payment and beneficiary payments would need to be taken into consideration when setting up this type of policy.
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Personal Superannuation and Retirement Planning
Superannuation is an important investment tool for most people in order to assist them in having enough money to live off in retirement. For many people their employer pays their 9% Superannuation Guarantee Contribution into the employer's fund or employee's choice of superannuation fund. Many self employed people who have set themselves up as a company, also pay themselves the 9% Superannuation Guarantee Contribution through the company. However there is a group of people who fall into a ‘superannuation black hole' and who receive no superannuation support whatsoever. These are the self employed people who are sole traders or partners in a partnership. They do not have to pay themselves the statutory 9% Superannuation Guarantee.
Here at Instrat we can assist you with your superannuation structure, investment asset allocation and retirement planning through your superannuation plan. We are not a set and forget adviser, you are our valued client and we can continue to assist you with all your superannuation needs, including the following:
- Superannuation set up and ongoing advice
- Superannuation Investment Planning and asset allocation
- Superannuation structure and advice (Self Managed Superannuation Funds)
- Retirement Planning – ensuring that you have enough to retire on
- Superannuation Co-Contributions
- Superannuation monies consolidation
- Finding of “Lost Super”
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Business and Corporate Superannuation
Most business owners have enough on their plate in running their own businesses than have to worry about their business' superannuation. In the ever changing world of superannuation, we can assist your business in keeping abreast and up to date with the latest superannuation law changes and advise you on these changes. Whether your business has 1 or 100 employees we can help with the following:
- Business/Corporate Superannuation set up
- Business/Corporate Insurance advice (Life, TPD, Income Protection)
- Ongoing support from Instrat and the fund manager
- Ongoing employer and employee support
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