Why You Might Consider Income Protection Insurance

Income protection insurance is categorised under the living category of life insurance. There are lots of reasons why income protection insurance is ideal. With the uncertainties of life, you cannot tell when an injury or illness might strike at you. All you can do is to prepare ahead of time and be protected by taking out an insurance policy which can provide financial benefits in the event that you are not able to perform your job and earn income. With income protection insurance, 75% of your monthly salary is paid to you in the event that you are not able to work because of injury or illness. In this way, you will have the peace of mind knowing that you have the money to sustain your family’s subsistence despite of being ill or injured.

Income protection insurance generally provides financial security and gives you peace of mind regardless of the problem you are facing. The burden is eased knowing that your family did not lose the source of income to maintain their lifestyle. The insurance can ease the emotional impact of the situation as well. So if you feel that this type of insurance is a necessity for you, begin to look into your options and ask for an expert advice if possible. Income protection insurance can be availed through different ways and you need to structure your policy in a way that you get the maximum financial benefits.

Structuring Income Protection Life Insurance

There are different ways to structure your income protection insurance. The choice of structure will greatly depend on you after considering your needs and other factors. And for you to choose the right one, it would help if you seek the advice of professional to shed light on this matter. In this way, you get to maximise your benefits. There are times that these structures might seem complex and you need to choose the right one.

Basically, income protection insurance is tax deductible whether you own the policy in your name, a family trust and or super fund. But the difference between the three is the taxation treatment. The different ways to structure your income protection insurance offer pros and cons so you need to identify which one is more suitable to your present situation and at the same time receive the maximum benefits.

Structure Options for Income Protection Life Insurance

Incorporating insurance to your superannuation is becoming more attractive to people. Most insurers are now marketing such policies where all your types of insurance can now be afforded through the super fund. This scheme has its advantages and disadvantages and it pays to be cautious regarding your decision to make sure that you are directed to the right path. The main advantage of buying insurance through super is that it is much cheaper and offers group discounts and lower premiums. Premiums are automatically deducted from your super fund hence you do not need to spend extra to pay the premiums. Tax paid is lesser and allowing you to get a higher coverage when needed. Smokers and non-smokers pay the same cost and there are also no occupational restrictions.

The downside of this scheme of buying income protection through your super is that your basic coverage might be lower compared to a regular insurance and this basic coverage might get lower as you grow old. You need to be wary also if your employer is paying the premium regularly through superannuation or else your basic cover might come to an end. If you are not mindful about your super and do not supplement it through other schemes, chances are, your retirement savings might be at risk or be depleted as your premiums are paid out of your fund.

Another option that you can look into is for your income protection to be owned by the trustees of a family trust or a company. In this case, the business pays the premiums in order to provide income protection benefits. The premiums are deductible to the business and in the event that a claim is made, the benefits are taxable against the employee. This income protection insurance structure is offered to the employees in a form of salary continuance benefits.

If you want to be more secure and have the finances to pay for a standalone policy, you can take out one. Owning a separate income protection insurance can be expensive and requires payment out of your after tax income. But with standalone policy, you can select a policy which is tailored to your needs. You are able to take advantage of longer payment period which is until the age of 65. And when it comes to making claims, you can do it with fewer complications. It is advised that you explore your options first and find the one that you can afford to buy and getting the utmost benefits that you deserve.

Types of Life Insurance to Consider

Before taking out or applying for a life insurance policy, it is important that you know your needs first and then decide on the type of life insurance that will benefit you the most. Life insurance is not only limited to term life insurance which provides financial benefits to the nominated beneficiary of the insured in case of his death. While this type of policy will provide financial security to the bereaved family, you can always supplement your term life insurance with the other cover under the living category of life insurance. Trauma or critical illness insurance provides a lump sum amount in case the insured person is diagnosed with an illness included in the policy coverage. Once you get the claim, you can use the money not only to sustain your medication and rehabilitation but to cover for other expenses incurred for your family’s subsistence.

Income protection is a type of insurance that provides you with up to 75% of your monthly salary replaced when your performance of income-generating work is impeded by an injury or illness. This cover will benefit you while you take a temporary leave from work for you to recuperate. This type of insurance gives you a peace of mind especially if you are a breadwinner. Even if you suffer from accident or illness, you need not worry about providing for your family because you have the insurance that will take care of your financial concerns. Even young professionals who are still single can also take out this insurance for them to be financially independent. Total and permanent disability insurance is a type of cover that gives you a lump sum amount if you become disabled and unable to work or perform your previous activities including your day job.

Why Take Out a Life Insurance Policy?

Basically, you take out a life insurance policy to secure you and your family’s future. It provides you with peace of mind knowing that you have prepared something that will benefit your family and allow them to enjoy a better lifestyle. Having a life insurance policy will also free you from financial burdens in the event that you are struck by unforeseen events such as injury or terminal illness. With the benefits that life insurance offers, you can say that it is truly life’s necessity. The different types of life insurance can help you in any unforeseen events including injury, illness or death.

Aside from the obvious benefits of life insurance which is to provide you with financial benefits when you need them the most, it is also a sound estate planning scheme. The lump sum amount that you and your beneficiaries can claim can be used for seeking medical expenses, funeral expenses and cover for the daily expenses of your family including children’s education. With the right kind of insurance, you are secured to have this cover and have the finances that you need in sustaining and maintaining your lifestyle.

Considerations in Applying for Life Insurance

The process of application can only take a few hours of the day as long as you have complied with all the requirements. After that, you can start paying your premiums and secure your family through your insurance cover. But before you make your application, there are things that you need to consider and understand. First, understand the standard provisions of the life insurance especially the coverage and terms and conditions of your policy. You need to provide all necessary information needed in your application and disclose pre-existing medical conditions if there are any.

Second, decide on who you will assign as the insurance beneficiary. The insured individual can choose any beneficiary according to his or her wishes. You can have your insurance claim paid to your estate and it will be distributed as instructed in your Will of Estate Plan. You can also have your insurance claim be paid directly to your beneficiaries as stated in the policy document. You can also name other person to which you want your insurance proceeds to be paid. Other beneficiaries of your life insurance can be your superannuation fund, a company or trust.

A third consideration involves deciding on the distribution options. It is the manner in which your life insurance benefits can be distributed or the mode of payment for your insurance benefit. The most common is the lump sum distribution. It is a one-time cash payment to your designated beneficiary. You can also choose the interest option where you only receive the interest of your insurance claim which serves as your income while the death benefits are left with the insurance company. Beneficiaries can also choose for an installment option whether for a fixed installment period or fixed installment amount. It is important to have the proper information regarding your choice before taking out any form of insurance since this would entail a considerable monetary investment. Make sure to make your investment worthwhile in order to protect your family’s future at the maximum.

Introduction

Digital death is the relatively new first world phenomenon where digital imprints of yourself, your thoughts and your feelings are left behind online and on your computer, to live on after you die. However, while it is easy to get swept up in the romantic and futuristic idea of living forever, preserving your digital self for years to come doesn’t just happen – it takes care and preparation.

Just as you may take care to record a diary, or spend time passing on your knowledge, skills and family history to your children, so too do you need to properly prepare your digital legacy. It is not enough to understand what happens online when you die, instead you should also be asking what you can do to prepare for your digital death, so your loved ones can remember you the way you want to be remembered in life and online.

That is why we have asked two leading experts in the digital death community to share their insights and tips to help you prepare a digital legacy. Nathan Lustig is the co-founder of digital estate planning service Entrustet which was recently acquired by SecureSafe, will offer his advice on exactly how to create a reliable digital legacy, and why it is so important. Evan Carroll is the co-founder of the blog ‘The Digital Beyond’ and co-author of the book ‘Your Digital Afterlife’. Carroll is a regular speaker on the digital afterlife and digital immortality, and here he has shared some of his thoughts on the impact of digital death on families, loved ones and the wider online community.

So much of our lives are now lived in a digital format that it should be only natural to consider and plan for our digital death, alongside our physical death. Of course death will always bring with it stress and confusion, heightened by the emotional loss, but we have been preparing for physical death for many years, and have become quite good at it – life insurance plans, funeral plans, naming an executor and completing a will. Preparing for your digital death is not much different, but what makes it difficult is the fact that few people ever think to put a digital legacy in place.

As a result there can be a wealth of information trapped online and in danger of being lost when you die without a digital legacy. Think about all of the emails, photos, comments and events which make up your digital self and which are a real reflection of your life, and how important these connections would be to your loved ones once you’re gone. And don’t forget about your rights and the rights of those you’ve interacted with – the right to privacy, to intellectual property and the right to be remembered.

Why is it Important to be Prepared?

Many people avoid planning for their death, in both the real and digital worlds, because it can be an uncomfortable thought. However, you need to stop thinking about yourself, and start thinking about the people and things you will be leaving behind when you die. Whether or not you believe in the idea of closure after a loss, we all want to know more about who we are and where we’ve come from. While you may remember going through boxes of black and white photos with your grandmother, or listening to your parents’ stories of their childhood, your children and grandchildren will want the same opportunities, and they can have them, it’s just that your memories are in a slightly different format.

Both Lustig and Carroll agree that as many of our old ways of remembering have shifted into a digital format, for example, digital photos, videos and blogs, our attitude towards the preservation of these memories needs to change too. While photos and letters can be stored in boxes or albums for decades, think back to how you stored digital information just 10 years ago – and how hard it is now to find a computer with a floppy disk drive.

And before you think that preserving your digital legacy is just too hard, and not worth the effort, Carroll reminds us, ‘Go find that old photo of your parents or a letter they exchanged many years ago, is that not valuable to you? Chances are good that your digital content will be valuable to your heirs as well.’

It’s not just your personal digital content you should be preserving either, because if you run any sort of business, then you will have important digital assets which will need to be maintained after your death, to ensure the ongoing success of your business. For example, if your domain name lapses after your death because no one else knows the account passwords for renewal, then you lose an important directional and informational tool for new and existing clients. Whether or not your business is run primarily online or in the real world, there will still be a number of important business documents store on your computer, your back up drives and perhaps even online file storage sites, which will be integral to running your business when you’re gone.

Therefore, the challenge of preserving your digital details and resources is twofold – you not only need to provide loved ones or an executor with usernames and passwords to allow them access to your digital data, but you also need to make sure you inform others about the information you are storing and using digitally. It may be difficult to convince Facebook or Hotmail to access a loved one’s account without the password, but the real challenge for your family will be knowing that they’ve found everything about your digital self that they want to preserve. Bridging the awareness gap is particularly relevant in the business example, as your successors may be able to struggle along with what they can find after you’ve died, but having full access to all of your digital resources will make running and growing your business much more fruitful – which will of course in turn leave a valuable and lasting reminder for your family.

One final benefit which comes with creating a digital legacy is that which is common across all estate planning – peace of mind. With a detailed and relevant digital legacy in place, you’ll have the peace of mind that your family won’t have to struggle to access your digital data when you’re gone, and can instead focus on their memories, and those memories you’ve left for them. You can also rest assured that your digital assets and your digital self are preserved, transferred or deleted as you wanted.

1 – Identify your digital assets

Now you know that no matter who you are, it is important to consider your digital legacy, the first step is to identify those digital assets that you are planning to protect. Everyone’s list of assets will be different, as we all engage digitally and online in different ways, however, to start you thinking about what to include in your digital legacy, use the following steps:

• Identify your files. Your files will include emails, documents, images, audio files and other digital files. 
• Look at where your files are stored. You will need to protect files stored on all types of electronic devices such as your desktop computer, laptop, tablet, storage devices, mobile phone or smartphone, camera, or any other digital device you own or use.
• Identify your digital accounts. Your digital accounts can start to add up very quickly when you consider all of the shopping or community sites you’ve registered for just to view products or receive an email newsletter. Therefore, when you are identifying your digital accounts, usernames and passwords, think about your email accounts, software licenses, social network accounts, social media accounts, file sharing accounts, photo sharing sites, financial management accounts, domain registration accounts, web hosting accounts, tax preparation services, online stores, affiliate programs and anywhere else you may have registered.
• Developing technology. As you start to review your digital assets you may find that your means of storage is already dating rapidly, and so you not only need to identify what your digital assets are, but also where and how they are stored. You’ll also need to consider how your digital assets will be stored into the future, and whether changes in technology will change how and where your assets are stored and your accounts are held. For example, with the advancement of smartphones, everything on your phone is now also on your computer, and where one social media site merges with another, you may have an account with the new site created automatically for you.

2 – How to Choose a Digital Estate Planner

Once you have identified the digital assets you want to preserve, you will need to provide the details of these assets, with their passwords and other relevant instructions, to a digital estate planner. You can choose a friend, family member or business associate to act as the estate planner for your digital assets, or you can set up your digital legacy through and independent estate planning service, who will guide you through each step, make sure you haven’t forgotten anything, and help your family work through your assets when you’re gone.

To help you choose a digital estate planner, you will want to know a bit more about the service, which will typically include:

While it is possible to act as your own estate planner when putting your digital affairs in order, there are some important benefits to a digital estate planning service that you shouldn’t dismiss lightly:

• Complete access. Although you’re handing over the management of your digital estate to someone else, that doesn’t mean you’re giving up control. You will maintain complete access to your digital assets, and you can view, rearrange, upload, download and delete any of your information at any time.
• Peace of mind. By being in control you also know that you are doing everything you can to ease just some of the many stresses your loved ones will have to deal with when you die.  Not only can you save your family time and stress by providing them everything they need to manage your digital estate, but you can also help them avoid costly and lengthy battles with the communities in which you exist online.
• It’s suited to you. Typical estate planning doesn’t usually occur to us until we’re older, or have children and other dependents to think about. However, digital estate planning is just the opposite, because the younger you are, the more digital assets you are likely to have. Therefore, it can be very beneficial for anyone of any age to think about digital estate planning.
• Look after your legacy. We’re not all going to make important scientific discoveries or make waves in the business world, but that doesn’t mean we don’t have an important legacy to leave behind. Don’t dismiss the digital assets which make up your legacy, instead look after them, and make sure that they can be passed onto your loved ones, just the way you want.

3 – How to Create a Digital Legacy

In 2012 the volume of content shared is set to triple from the previous year, so with the sheer amount of information and experiences being shared online, it almost seems possible to preserve a person’s entire life online. As Evan Carroll points out, this is the theme of his upcoming South by Southwest Interactive Panel – Digital Immortals. Carroll believes that while we are ‘capturing an impressive amount of information online, and that it has the potential to serve as a rich record of an individual’s life,’ we’re not quite at the point of preserving entire people online, in the way they really appeared in life; however, Carroll certainly believes we are heading in that direction.

Therefore, if you are interested in creating a digital legacy to leave behind a digital imprint of yourself, start thinking about how you really want to be remembered. A quick scroll through previous years of your Facebook Timeline, Twitter feed or your overflowing email inbox will show you that there are plenty of digital imprints of yourself which don’t show you in your best light, don’t reflect your true feelings because you posted upset or angry, or just aren’t relevant anymore. So, while part of your plan will be to give your loved ones the tools to manage and memorialise your digital assets according to your wishes, you can take some responsibility now, by thinking about just how much of what you will leave behind is actually digital waste. Digital estate planning and digital legacies are not only about looking after your digital afterlife, but also aim to make the internet a more useful and enjoyable place.

Once you’ve done an initial audit of your digital assets you can start deciding what you want kept after your death, and what you want deleted. Consider your situation and the volume and complexity of your digital legacy, and decide whether an independent agreement with a friend or loved one to act as your digital executor will be sufficient, or whether you will need to consider specialist estate planning services and memorial websites.

Real Life Reasons You Need a Digital Legacy

Following are real life stories of families who have struggled to manage or memorialise their loved ones’ digital legacy because there was no digital estate plan in place.

Justin Ellsworth

Justine Ellsworth was a US Marine, and when he was killed in Iraq, his family was denied access to his Yahoo email account – the last remaining link they had to their son’s life. According to the Yahoo terms of service, they will not give an email password to anyone other than the account holder, and only after family members take the matter to court and prove their identity and relationship to the deceased account holder, will Yahoo provide them access. However, after 90 days of inactivity Yahoo will delete the account, so the court proceedings need to move quickly.

The Yahoo policy is a particularly stringent one, as the email provider AOL will allow the next of kin to access a deceased account by proving their relationship and faxing a copy of the death certificate. Even the military will automatically return all of a soldier’s possessions to their next of kin after their death, including all received mail, even mail which has not been opened. However, as Justin Ellsworth was part of the infantry on the front lines, he did not have a Marine email account, and so signed up for a free account with yahoo which he could access at any internet café while away from home.

Read the full story here

Karen Williams

When Karen Williams’ son Loren died suddenly in a motorcycle accident, she became interested in his Facebook account, in the hopes of learning more about her son, as well as notifying all of his friends of his death. However, Karen didn’t know the password to her son’s Facebook account, and Facebook wasn’t going to give it to her. When she did find her son’s password, she emailed Facebook asking them to maintain his account so she could go through it in detail, however, within two hours Facebook changed the password, denying her access.

Karen Williams was able to get back into her son’s Facebook account after a lawsuit and a two year legal battle. This resulted in Facebook allowing Karen 10 months access, before they would remove Loren’s page. Under the current terms of use, Facebook can be notified of a death online, at which point their page will be memorialised. Certain information is removed and the page can only be viewed by existing friends. If prior consent is given by the deceased, or if it is mandated by law, a download of an entire Facebook account can be provided to a family member.

Unfortunately the laws differ in each state, and the issue of digital deaths on social media are not covered explicitly by any current laws.

Read the full story here

Entrustet, Business Digital Assets

Entrustet is a digital estate planning service which aims to avoid situations like those above, by allowing you to leave a digital legacy, passwords and instructions for your loved ones. Even in the case of you dying without a digital legacy, Entrustet can conduct online searches and locate your digital assets and accounts, as well as provide assistance to your families to navigate the different terms of service for each online community.

One example of how digital estate planning could benefit you, is the Entrustet case of a 42 year old businessman who passed away without a digital estate plan in place. After a digital property search, Entrustet were able to find the following accounts:

Gaining access to the woman’s PayPal account which she had used to buy and sell online not only meant the family could add the funds to her estate, but closing the account also reduces the chances of the account being hacked, as many scammers prey on deceased accounts. The woman’s online photo galleries were also of sentimental value to her family and they could also choose to memorialise the woman’s Facebook page to allow friends and family to post memories and condolences.

The Basics of Mortgage Protection as a Life Insurance Supplement Option

It is important to understand that mortgage protection is not compulsory although some lending companies may include it as one of the conditions in securing loans if you are a high risk borrower. But it is recommended to anyone who has a mortgage to consider purchasing this insurance policy. Your mortgage protection will serve as a financial back up in case unforeseen events occur. There are some life insurance policies of this kind that will even cover any bills in relation to your mortgage and can include interest and repayments.

The State offers limited coverage benefits for those who cannot pay for their mortgage in the event that unforeseen situations and impediment to perform the job might happen, you will need another financial back up to overcome your financial obligation. Just like any other types of life insurance, there are certain conditions and limitations involved when making a claim from your mortgage protection insurance. The typical policy payout is usually for 12 or 24 months. There are instances where you cannot claim from your benefit if you are off work because of pregnancy except the medical complications arising from it.

Factors Affecting the Cost of Mortgage Protection Life Insurance

Mortgage protection policies vary in cost, which is dependent on several factors. Insurance companies determine your risk factors and other important considerations for you to determine the amount of premiums that you need to pay. Some of the factors can include the likelihood that you will become unemployed. The higher the risk that you may lose your job, the more your mortgage insurance may cost higher. In the event that you lose your job temporarily, your mortgage protection will cover for your payables within the payment period as stipulated in your policy.

The policy cost will also depend on the cost of your mortgage payments. If you are making modest payments at present, your mortgage protection insurance premium is going to be more affordable than those who are living in a million-dollar worth home. The present economy, inflation and recession will surely affect your mortgage protection cost for these factors affect mortgage payments. If these risk factors are evident then you can expect that the cost of policy will be higher.

Other Considerations About Mortgage Protection Life Insurance

Mortgage protection covers you for the balance on your mortgage and nothing else. If you need more that than then consider other options for life insurance. You can choose from income protection or trauma cover which can give you financial benefits and the freedom to spend your claim for other expenses like mortgage, children’s education, medical expenses and others. The premiums that you pay for the mortgage protection is relatively higher compared to term life insurance which can offer more financial benefits.

There are different types of mortgage protection insurance which you can choose from that may be more suitable to your needs. Your choices include mortgage life insurance, mortgage disability insurance and mortgage unemployment insurance. Make sure that you fully understand the policy before you take it. Mortgage protection can be an expensive cover so ascertain your need whether it would give your better financial help when you take out this cover or not. If you feel that this would make you more secure and will optimally protect your property, then begin to shop around for your options and find a policy that offers you reasonable cost and better benefits.

Homeowners who do not qualify for other types of life insurance policies due to the nature of occupation or state of health can opt for mortgage protection cover to secure their property in times of unforeseen events. This insurance can cover for your mortgage while you are temporarily out of work and looking for one. If you have savings and you do not want to deplete the fund, then you can also depend on the mortgage protection insurance to take care of your payable. It is a cost-effective way as compared to using your savings which you can prepare for other emergencies. So be careful with your financial planning and always consider the pros and cons of your options.

However, if you do not have a life insurance policy and need to get a life insurance policy if you are over 50, you can still benefit from the many different life insurance policies that are available to people who are older than 50 years. But before we talk about the different life insurance policies you can be eligible for, let’s take a look at some of the huge benefits of having life insurance over 50.

Getting Life Insurance Over 50 – The Various Benefits

Making sure your family is cared for: Gone are the days when a 50 year old had completed all his responsibilities in life and was living a comfortable retired life. In today’s age, most 50 year olds still have to worry about their mortgage payments, credit card debts, as well as familial responsibilities towards their spouse and small kids, and in many cases they have significant responsibilities to their grandkids. Thus, having adequate life insurance enables you to leave enough money to your family if you meet an untimely death. Not only will your family be able to meet their daily expenses if you have adequate life cover, but they will also be able to pay off home mortgages and other loans with the money from the life insurance policy. Thus, life insurance over 50 is not an option, but is an absolute necessity. And it is all the more essential if you are the sole earning member of your family, so that your loved ones do not have to face hardships when you’re gone.

Having enough money for your retirement: With life insurance over 50, you can ensure that you have enough money for your retirement years by opting for a life insurance policy that covers life, and also has an investment component. Such a life insurance policy will thus keep you covered in both the circumstances. If you do happen to die earlier than normal, at least you’ll know that your loved ones are taken care of. And if you do happen to outlive the duration of the policy and see it till maturity, then you can use the proceeds of the life insurance policy to help you get by in your retirement years.

Taking care of your health: Once you are over 50 years of age, the likelihood of you developing health problems will obviously increase. And with the ever increasing cost of good medical care nowadays, you may not find it financially feasible to take care of your health. This is why you need to get a life insurance over 50, so that the money from your policy can help you to tackle unforeseen health problems for yourself and your family.

Term Policies:If you need to get a life insurance over 50 for the sole purpose of life cover, then a term insurance policy is your best bet. The premiums in such a policy are very low as compared to whole life policies and the entire sum insured will go to your beneficiary in the case of death. However, most insurance companies offer term policies only till the age of 65, thus the duration for which you will be covered may be limited.

Therefore, if you need to get a life insurance over 50, do make sure that you look at several insurance companies and compare what they are offering you. Also, you may be covered under life insurance as part of your employment package. If that is the case, you may want to check what the terms of that policy are and only then buy additional life insurance cover over 50.

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Benefits of Income Protection as a Life Insurance Supplement

If there’s one thing that you do not wish to happen, it is waking up one day and having no ability to perform a job to earn income. Injury and illness are major hindrances that can affect your ability to perform your work in order to earn income. If the illness or injury is severe, chances are you cannot perform your regular day job since you need to recover or recuperate from your condition. You may take advantage of your sick leave which entitles you for a pay but for a limited period only. With income protection, your policy can pay you for 2 years, 5 years or to age 65 depending on your package. This cover will allow you to continually support for your family’s expenses even while you recover from sickness or injury and therefore giving you the peace of mind and sense of security.

Income protection can replace up to 75% of your gross income and can provide you with the money that you need even if you are unable to your work. Even if you are young, single or married, you rely on your regular income, and taking out income protection is ideal. This is very much needed if you have debts that you need to regularly pay like mortgage, home or car loan, utilities and others. In most cases, income protection will provide you with your basic needs to maintain a comfortable lifestyle for you and your family.

Who Needs Income Protection Life Insurance?

If you are solely reliant to your income and life would become harder if you could not earn income for an extended period of time, then income protection insurance is an ideal cover that you should consider. You should ask yourself and think about your situation very carefully in order to find out if income protection is the most suitable cover for you. You should consider if your employer can pay you a percentage of your salary indefinitely of you are sick or injured. If your employer is not able to give you such benefits, then you need to have a back-up plan in the form of income protection whenever unforeseen events happen to you,

If you are young and still single but you do not have enough savings to sustain you when you are off work and you desire to be financially independent, then taking out income protection will definitely benefit you. If you are a family person and you have dependents that rely on you, then supplementing your salary with income protection will surely give you peace of mind because you are sure that you are able to sustain the needs of your family even if you take a leave from work due to illness or injury. Remember that accident, sickness or disability can happen to anyone. You are not spared from these eventualities and it would be devastating as well if you are not financially prepared during these circumstances. So before things happen, it would be shrewd to prepare and spare yourself and your family from financial burdens by taking out income protection insurance.

Factors Affecting Income Protection Life Insurance Premiums

Now that you have realised the importance of income protection, taking out the policy will entail paying the premiums. The cost of policy can vary from one person to another. This is because of the different factors that affect the cost of the policy. One factor that is considered is age. Premiums usually increase with age because of the risk factors but you can choose to lock premiums in using level life insurance. Gender is also a consideration and income protection for males is generally cheaper than that of females. Medical history is important as well and those who have unfavorable history can expect to pay higher premiums.

Insurers will also ascertain if you are a smoker or non-smoker. Smokers pay a higher rate compared to those who abstain or do not smoke at all. High risk occupation requires you to pay higher premiums that those jobs with lesser assumption of risk of danger. Waiting period and benefit period are two factors that will affect not only your premiums but claiming process as well. You can also choose to have other inclusions in your income protection which can provide you with better cover but at the same time increase your rate of premiums paid monthly. It is always wise to get enough information and ask advice from experts to make a sound decision.

What Makes Key Man Insurance Important

Key man insurance is also known interchangeably as key employee insurance or key person insurance. It is a type of insurance coverage where you business pays for the premium and it become the beneficiary in the event that the insured person (which is the key man of your business) dies or suffer from disability. This form of life insurance makes a practical option for you especially when your key man is the main worker. Small businesses usually have limited numbers of workers and most of them play a major role in the operation of your business.

In case the key worker of your business becomes unavailable, your business operation will be on hold and could not carry on. As a result your business and your customers will suffer. This can be prevented by having your key person insured through the key man insurance policy. The insurance benefits that you can claim for your business can be used to pay for your business maintenance, utility bills, debts and employee salary. In the absence of your key employee, you can use the insurance benefits in paying for the overhead costs of your business until you find a replacement for your key worker and have your business running again regularly.

Business owners and shareholders can enjoy the peace of mind that the business can run smoothly without disruption of its operation in case of a loss of a key employee. Even you have lost a major salesperson of your business or an executive may have suffered an untimely death or disability that can adversely affect your business performance, you can be assured that your key man insurance benefit have your business covered against the risks of losses.

In small and medium businesses, the success is usually dependent to only a few persons who are skilled and have adequate experience, making them very valuable to the business owners. The absence of these essential workers can produce damaging effects to the business performance. One possible remedy that business owners have is to apply for a key man insurance policy. While at the stage of adjustment because of the loss of the key worker or employee, the insurance benefit can provide financial assistance to keep your business afloat.

The key man insurance also includes coverage for an executive of your business. In case of disability or death of an executive, you may lose valuable management skills that could adversely result in reduced profit and productivity. Moreover, your business may also incur significant costs for training new employee who will replace your business’ key employee. In this case the insurance benefit from your key man insurance policy can help in paying for the training costs.

How Does Key Man Insurance Work

With key man insurance, your business is able to purchase a form of life insurance policy that covers your key employees in case they die or suffered from disability or injuries. Being the beneficiary in case these events occur to your key employees, your business will have sufficient funds that would adequately replace the losses it may incur from losing a valuable worker or employee. The premium cost for the key man insurance is quite minimal as compared to the potential benefits your business will receive.

The business will own the policy and it becomes the beneficiary of the insurance. The payment for the premium is not tax deductible but the proceeds are usually income tax free. It is important to note however that the key man insurance provides protection to the business itself and not to the key employee. It is different from personal life insurance. The insurance benefit taken from the key man insurance may be used for any purpose. The proceeds are useful in paying for the expenses to be incurred when finding a replacement for the key employee or it can also be used to cover any revenue deficit in the short term period or pay the overhead costs of your business while it is not earning well because of the loss of your key employee. It can also be used to strengthen your business credit position or securing loans for business expansion.

Key Man Insurance Advantages and Considerations

Key man insurance provides a cost effective solution in protecting your business against losses in case you have lost a key employee who is valuable to your business operation. Business options are retained, such as maintaining the stability of your business while you are training new employee to replace your key employee. Key man insurance is also affordable and more accessible to apply for since it does not require IRS disclosure.

Moreover, the stakeholders and business owners are able to feel confident that in the event of losing one of their key employees, the business will not suffer. They also have the leeway to choose which employee to insure. Another advantage of the key man insurance is that the proceeds of the insurance policy are tax free. You should not however rush to purchase the key man insurance. It is necessary to determine first which employee is most valuable for your investment.

Superannuation for Self Employed

One way that a self-employed person can avail of life insurance premiums that are tax deductible is through superannuation fund. If you are a self-employed business person, it is not mandatory for you to contribute to a super fund. But if you want you prepare for your retirement, you can always consider contributing to a super fund. From July 1, 2007, most self-employed individuals will be able to claim a full deduction for contributions made to their super until 75 years old. They are also eligible for the super co-contribution payment. It is also necessary that you give your super fund your tax file number to make the most from your superannuation.

If you are self employed, you have the wide choice of possibilities to select your super fund from any of the insurance companies, banks or other financial institutions available in the market. These sectors are generally public-offer funds and can accept contributions from the public at large. In choosing the fund to use, you should consider the administration fees, reputation and investment performance of the institution, insurance cover options available to you and the affordability of the premium rate you need to pay. You can also customize your super according to your needs and this choice should be properly communicated to your chosen institution to enable them to help you tailor your insurance policy coverage accordingly.

Taking life insurance through your super is not only tax deductible but the premiums are cheaper as compared when taking out a standalone policy. It is a good thing that super fund is now available even to the self-employed individuals and it offers more affordable options. But you need not only look at the good side of choosing super but you have to understand its drawbacks as well such as limited claim from your cover and depleting your retirement fund if you make insurance claims from time to time.

Tax Deductible Life Insurance for Self Employed

Aside from considering superannuation fund which will allows you to take advantage of tax deductible premiums for life insurance and total and permanent disability (TPD) cover, you can also consider income protection as your choice of cover. Whether income protection is taken out as a standalone policy or under your super, it is always tax deductible. If you are a bread winner or single in status and your income is very vital to you and your family’s subsistence, the income protection cover is very ideal. This life insurance can pay up to 75% of your income whenever you suffer from an accident or illness. It will help protect your livelihood and securing your future by taking care of your living expenses.

If you want a more comprehensive cover, income protection can be bundled with other policies such as TPD or trauma insurance. But remember that if this insurance is a standalone package, then only income protection is tax deductible. This is because any premium which will be used to pay lump sum death, disability or trauma is generally not tax deductible. But if the policy is taken out under your super, then a different scenario might happen which can qualify both income protection and TPD as tax deductible. So be very careful when purchasing an insurance policy and always inquire about tax deductibility of the premiums from your insurer.

Understanding the Tax implications of Life Insurance Options

Taxation process and rules can be confusing especially if you are not well versed about them. But the important thing that you want to know is whether you can avail of tax reductions of your expenses and one of those is you insurance premiums. If your insurance is tax deductible this means that your tax payable can be reduced thereby increasing your take home pay. It would be ideal that you take out life insurance that is tax deductible to enjoy a more cost effective life insurance policy. If you are going to pay your insurance premiums within superannuation, it is going to be tax deductible and the amount being paid will not be subjected to marginal tax rates. But there are instances where superannuation contribution may be subject to surcharge which you have to determine by asking for advice from experts. Paying for surcharge may reduce tax effectiveness.

Another consideration that you should understand is whether your insurance proceeds are taxable. If the insurance policy is within superannuation, the proceeds is taxed depending on the factors like the recipient of the benefits whether a dependant or non-dependant, the form in which the insurance benefit is paid out or whether the benefit contains an excess reasonable benefits limits (RBL) component. So if you are unsure regarding tax deductibility, it will always help to ask for a sound advice from experts rather than investing into something that you are yet uncertain.

An insurer also wants to know if you’ve got high blood pressure and smoke like a chimney. If the insurance provider learns about things, such as unhealthy habits and vices or an outstanding family history, it assumes there is a greater chance you will die during the term of your life policy. This means that they have to pay up. When this happens, they usually adjust the premiums and charge you higher than the average to reflect your lower life expectancy. Insurance is brutal like that.

If you smoke, are overweight, or suffer from diabetes, cancer, bowel problems, high blood pressure, or depression, stress and anxiety, you will have to pay more for cover. That’s because insurance company underwriters consider these to be some of the biggest threats to your health.

What Your Insurance Provider Need to Know

The underwriters don’t just want to know about your personal state of health. They would even want to know about your family’s medical history up to the littlest detail. If one of your family members, like your father or sister, has suffered a serious medical condition, there is likely a greater chance that you will have the same condition as well.

Your insurance provider doesn’t give nary a thought if your father broke his ankle playing football when he was 15: it is, on the other hand, looking out for inherited conditions such as coronary heart disease, stroke, cancer and diabetes. If a close member in your family has been afflicted by one of these conditions, they could bump up your premiums.

Insurance providers may look be misunderstood as heartless and cold. All they do is to calculate how long your life expectancy will be and charge you more if the risk of dying early is possible or probable. But that is how insurance works – just another day at work.

An ideal alternative would be to charge everybody the same amount of premium. However, this suggested practice would be very unfair on healthy people with long life expectancies. Moreover, it would also push up the cost of insurance for everybody, as people in poor health would have an incentive to take out large amounts of cover, and insurers would have to charge more to pay their claims.

Disclosing the Facts

When you apply for life insurance, it is a standard practice that a client will be asked to fill out a questionnaire which would ask you some pertinent questions. The questions might ask you to disclose details about any health issues. Most, if not all, insurance providers would ask your doctor about your personal medical history, especially if you are buying a large amount of cover. In some cases, it may also ask you to take a medical examination before you can be insured.

No matter what medical problems may be in your medical history, do not be tempted to hide it in order to get a cheaper premium, do not avoid answering the question or disclosing what it is. If these things pop up after you die, which is likely – insurers would like to take a look at things to assess whether you will be considered in breach of your policy conditions. If this happen you may be refused the payment.

Your Illness and Your Premium

How strong the impact is of your medical problems on your life insurance premiums will depend on the type of illness you have. If you have personally suffered from cancer, for example, you will need to be clear of its symptoms for at least five years before you will be offered protection. On the other hand, if you have Type I diabetes, you could pay two or three times as much for cover.

As far as your family’s medical history is concerned, your insurer’s attitude will depend on the condition – how many family members were affected, and how old they were at the time. If only one of your close relatives was affected, it may have little or no impact on your life insurance premiums. Each assessment of the situation would depend on provider.

Other things that your insurance provider would be looking for and asking you about will be for family illnesses that were diagnosed before age 60 or 65. If they were diagnosed after that, they will be disregarded.

If there is a history of a particular illness or illnesses in the family, your life insurance provider will either charge you more or may even exclude that particular condition from cover, while covering all other conditions in the usual way.

Different insurers have different underwriting rules, and some may ignore family history altogether. So it is well worth comparing quotes to find the best deal for your personal circumstances.

You may or may not have some kind of medical history concerning health issues, but it doesn’t mean that you have to skip or disregard getting life insurance cover for you. With all the unexpected things in life, it is still wise to have foresight and get the necessary cover for yourself.

Know Your Group Life Insurance Options

As an employer, you need to identify your options on the kind of group life insurance that you can avail for your employees. There are two basic group of life insurance that an employer or entity can consider. Group Salary Continuance is a type of life insurance that allows a continuous flow of income and can cover up to 75% of monthly salary in the event that an employee is not able to go to work either temporarily or permanently because of illness or injury. Group Life and Total and Permanent Disability are another group life insurance cover that provides lump sum benefits in the event of death or total permanent disablement of members.

Group life insurance is very important to your company because it protects not only the interest of your business but also your employees. If your employees take a leave from work due to illness or injury, your business operation is also affected. The insurance will also supplement your need in case that you cannot pay for a prolonged period whenever employees avail of sick leave. You can also look for group life insurance that is customized to your company’s needs. So better understand your group life insurance options so that you can maximize the benefits that you and your employees will receive.

Compare Prices and Get Group Life Insurance Quotes Online

Another step that you should do is to begin comparing group life insurance prices. You should check the rating of the insurance company that you consider. Make comparisons of the existing group life insurance packages available in the market. You should at least compare three insurance companies and the policies they offer. If you are considering income protection or salary continuance cover, then look for the best companies that are known to be offering such cover and same with life insurance or TPD.

One convenient way that you can make comparisons is through getting online insurance quotes. Most insurance companies offer a multiple quote service that you can take advantage. In this way, you can save time and all your information is entered only once. After that the result will be displayed and you can now begin comparing. Look for companies that can provide you with the insurance according to the number of members or employees that you need to include in the policy. Make sure that the amount of the policy is reasonable and remember that as a general rule of thumb, the premium should cost you less than 1% of your total payroll.

Select a Reputable Insurer for Your Group Life Insurance

It is important that you select a trusted and reputable insurance company. You need to transact with the one that you are confident to deal with for the years to come. Choose the company with the best range of products. Make sure that they have the insurance that will meet your needs now and into the future. You have to consider the situation of your company and employees and compare what they offer as well as the price. Since you will be dealing with the company for a significant length of time, you should ensure the financial stability of the insurance company in order to protect your investment and to ensure you money placement. You have to ascertain the insurance provider’s reputation and make sure that you are dealing with a recognised financial institution. You can do research about the company history, background and company profile and performance.

One important thing that you should also look into your choice of insurance company is the customer service that it provides. It is necessary that the company has a team of professional insurance advisors who can answer all of your questions and assist your needs. Find insurance providers that can give prompt action when you need to make a claim. You can read customer reviews online or listen to some complaints from clients regarding the insurance company you are interested of dealing with. You need also to look into the cost of life insurance policies that the insurer is offering. Do not be fooled by cheap policies because these might have hidden charges which will result to a higher premium on your part. Deal with insurers who are able to give you upfront answers to your queries especially with regards to costs. But most importantly, you need to compare the insurance coverage offered and scrutinize the terms and conditions stipulated on their insurance policy to help you determine the best group life insurance provider that can provide you services and benefits that are best tailored to your needs and budget.