Insurance – for your peace of mind is an Authorised Representative of RI Advice Group Pty Ltd

Insurance – for your peace of mind is an Authorised Representative of RI Advice Group Pty Ltd

Insurance – for your peace of mind is an Authorised Representative of RI Advice Group Pty Ltd

Insurance – for your peace of mind is an Authorised Representative of RI Advice Group Pty Ltd My Name Financial

Insurance – for your peace of mind is an Authorised Representative of RI Advice Group Pty Ltd JV logo

5 Disclaimer Important Notice RI Advice Group Pty Ltd, ABN , holds Australian Financial Services Licence Number and is licensed to provide financial product advice and deal in financial products such as: deposit and payment products, derivatives, life products, managed investment schemes including investor directed portfolio services, securities, superannuation, Retirement Savings Accounts. The information presented in this seminar is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. RI Advice Group strongly suggests that no person should act specifically on the basis of the information contained herein but should obtain appropriate professional advice based on their own circumstances. RI Advice Group Pty Ltd | ABN AFSL

6 Experienced - Over 30 years experience - Over 80,000 clients - Over $10b under advice Professional personal advice Advice underpinned by quality research and technical teams Over 110 offices nationwide RI Advice Group: our credentials

7 Your most important asset What is personal protection? Types of insurance/protection against the unexpected Why you need protection What are the costs? Summary Agenda

8 Many people consider their family home, investment property or superannuation to be their greatest financial asset What about your future income? How important has your income been in achieving your current financial position? Who depends on your income? What is your most important asset?

9 A few questions to think about  What would happen if you were not around to provide for your family?  What would happen if your spouse/partner was not around?  Who would pay the mortgage if you had a short term illness?  What would happen if you were not able to work due to permanent disablement or severe illness?  What would happen if you had to give up work to care for a family member?

10 What is protection?  Transfer of risk from you to the insurance company  Insurance creates an environment in which people and their families can operate with peace of mind  Without protection, an unexpected event can leave individuals and families financially destitute  It is a means of protecting your wealth, assets, income, life, dependants, health and future plans

11 Types of personal protection  Life cover  Total and Permanent Disablement cover  Trauma/Critical Illness cover  Income protection  Living expense cover  Business cover

12 A few facts  In 2012  Ischaemic heart disease (20,046) and cerebrovascular including stroke (10,779) were the top 3 causes of death overall in Australia  Followed by dementia / Alzheimer's (10369) and trachea, bronchus, lung cancer (8137)  Ischaemic heart disease is the top cause of death for both male and females  Trachea, bronchus, lung cancer is the next ranking cause in males  Dementia / Alzheimer's is the next ranking cause in females  Cerebrovascular causes rank third for both male and female deaths.  Heart disease is falling but dementia is on the rise  In Females aged 25 – 44yo Breast cancer is the most common form of cancer related deaths  Land and transport accidents are a leading cause of accident related deaths. Source: AIHW 2013 analysis of AIHW National Mortality Database

13 Common myths Centrelink or worker’s compensation will cover you in the event of illness or accident Centrelink will pay a maximum Disability Support Pension of: – $842.80* per fortnight for singles ― $635.30* per fortnight for each member of a couple Worker’s compensation will only cover you for an injury that occurs at work ― ABS statistics state that 60% of all injuries occur away from the workplace * Pension rates valid until 31/12/2014

14 Life cover  Life cover insures a person in the event of death  It pays a specified lump sum or instalments on death of the life insured  Some super funds automatically provide you with some level of insurance. However, the default level of cover is generally not enough to meet the needs of most people’s dependents

15 What do you use it for? On death, a family can use life insurance to: Pay medical and funeral expenses Pay legal expenses Clear debt (home mortgage, credit cards, personal loans) Replace household income Life cover

16 Who should consider life cover? People with dependants who require funds to cover:  Repayment of debts  Replacement of household income  Children’s education  Childcare and housekeeping  Care of disabled children  Medical and funeral expenses Life cover

17 Total and Permanent Disability (TPD)  Pays an agreed lump sum, or instalments, to the insured on being classified as never being able to work again  TPD is normally combined with life cover or trauma cover

18 Example: Cost of life cover 40 year old non smoker male Life insurance with any occupation TPD - $200,000 Cost is approx $377 pa 40 year old non smoker female Life insurance with any occupation TPD - $200,000 Cost is approx $347 pa

19 Example: Cost of life cover 50 year old non smoker male Life insurance with any occupation TPD - $800,000 Cost is approx $3,464 pa 50 year old non smoker female Life insurance with any occupation TPD - $800,000 Cost is approx $2,969 pa

20 Trauma cover Pays a lump sum, or instalments, when the insured suffers a specified medical condition Most policies have around 35 specified medical conditions The most common specified medical conditions claimed are: - Cancer - Stroke - Heart attack - By-pass surgery - Angioplasty These 5 conditions make up approximately 80% of all trauma claims

21 Why would you need Trauma cover? Used to provide financial cushion in the event of a major illness Trauma insurance can cover costs associated with: – Medical & rehabilitation – Financial stress of income lost – Employment of home care – Modification of home/vehicle – Travelling overseas to seek specialised medical assistance Trauma cover

22 Who should consider Trauma cover?  Anyone with debt  Couples with children  House wife/husband who are not employed but essential to the family’s well being  Business partners Trauma cover

23 Example: Cost of Trauma cover 40 year old, male, non smoker, Clerical/Admin occupation Sum insured amount of $100,000 Cost is approximately $406 pa 40 year old, female, non smoker, Clerical/Admin occupation Sum insured amount of $100,000 Cost is approximately $422 pa Premiums are based on stepped premiums for Stand Alone Trauma

24 Example: Cost of Trauma cover 50 year old, male, non smoker, Clerical/Admin occupation Sum insured amount of $100,000 Cost is approximately $1,018 pa 50 year old, female, non smoker, Clerical/Admin occupation Sum insured amount of $100,000 Cost is approximately $784 pa Premiums are based on stepped premiums for Stand Alone Trauma

25 Over one-quarter (26%) of those seriously injured due to road traffic crashes sustained life- threatening injuries over the 9-year period from to The highest rates were for persons aged 15–24 years for both males and females The rate of cases involving pedal cyclists shows an average annual rate of increase of 6.8%. Source: 1.Australian Institute of Health and Welfare 2.Australian Bureau of Statistics, Road Traffic Accidents,1984 Illness and injury In 2007–08, almost all Australians aged 15 and over (99%) had at least one risk factor for poorer health (such as high blood pressure or not eating enough vegetables), and about 1 in 7 people had 5 or more risk factors.

26 Injury  In 2001, over 2 million Australians had a long term health condition due to injury  Males of all ages are more likely than females to experience injury  The most common injuries in were falls (29%), followed by other unintentional injuries (26.7%)  Physical injuries can inhibit your ability to earn income and be a serious impediment to your financial future  Worker’s compensation can protect you financially for injuries suffered at work, but those that occur outside of work are not covered

27 Income protection Pays a benefit (up to 80% of salary) if the insured person is unable to work due to sickness or injury. Pays an income stream over the selected benefit period chosen (can be 2 or 5 years or until age 60 or 65)

28 Why would you need income insurance?  Guarantees stability of the household income to cover general living expenses (for singles or families)  Ability to continue paying mortgage/loans  Ability to continue paying bills  Ability to continue making superannuation contributions Income protection

29 Who should consider income protection?  Anyone earning an income  Anyone with mortgage/loan commitments  Anyone with family members that rely on your income Income protection

30 Income protection options Waiting Period - between 2 weeks to 2 years. Benefit Period - as short as 2 years or to age 65. Guaranteed, Agreed Value or Indemnity – Defines how your benefit is calculated based on the level of income you’ve earned in the past. Income protection

31 Key features of income protection  You should understand the main criteria and how they are defined in your insurance contract.  Premiums are generally tax deductible Main criteria you should be aware of:  Total disability definition  Partial disability definition  Offsets  Exclusions Income protection

32 Example: Costs of income protection 40 year old, male, non smoker, income $100,000. Benefit of $6,250 per month Policy is a 30 day wait payable to age 65 with claim indexation Average premium is $1,675 pa 40 year old, female, non smoker, income $100,000. Benefit of $6,250 per month Policy is a 30 day wait payable to age 65 with claim indexation Average premium is $3,048 pa

33 Example: Costs of income protection 50 year old, male, non smoker, income $100,000. Benefit of $6,250 per month Policy is a 30 day wait payable to age 65 with claim indexation Average premium is $3,067 pa 50 year old, female, non smoker, income $100,000. Benefit of $6,250 per month Policy is a 30 day wait payable to age 65 with claim indexation Average premium is $5,378 pa

34 Living expense cover Designed for: Retirees Pre-retirees Casual employees Home makers/ stay at home mums and dads People that want basic cover People ineligible for income protection

35 Business cover Designed for: Business owners Self-employed To help cover costs if the unexpected was to occur: Rent Business loan Overheads Salaries Almost a quarter of people retire because of ill health, injury or disability

36 Many people are underinsured Protection allows you to transfer the financial risks of death/disability/ illness to an insurance company Whose financial future are you putting at risk by not having enough insurance cover? Summary

37 The right funds lifestyle maintenance, children’s education, debt cancellation In the right hands partner or spouse, children, grandchildren, charities, minimise tax At the right time immediate, medium and long term needs Protecting your loved ones with appropriate cover and estate planning Plan for the unexpected

38 There is a large chance that you will suffer a major health condition before you die or that you die prematurely. Will you, your family or your business be financially healthy if the unexpected occurs? Plan for the unexpected

Thank you for attending

40 Case study: Living expense cover Mary, a retiree 60 years old Diagnosed with rheumatoid arthritis No longer able to perform her home-make duties $3,000 per month cover to age 80 will pay for - Full time carer - Cooking needs - Cleaning needs

41 Case study: Life cover Richard, a 45 year old electrician With a wife (Sally) and 2 young children Diagnosed with leukemia Died within 12 months $800,000 lump sum paid to policy owner – Sally. Allocated: - $7,000 funeral costs - $13,000 immediate expenses and recovery holiday to see relatives - $100,000 repay mortgage - $50,000 investment bond for children’s future - $630,000 portfolio to pay annual living costs for family