Risks:
•As part of determining whether my insurance policy advice is appropriate to you, you should also consider: • Based on your declared salaries of $245,000 (Charles) and $286,871 (Wendy) I estimate your annual SGC contributions to be $28,175 and $30,000 respectively. Please be aware that your annual insurance premium which is being paid by your super fund is using approximately 10% & 26% of your annual super contributions (retirement savings). • It is therefore important to realise that premiums paid using superannuation can have a significant impact on the balance of your superfund when you get to retirement. If this is a concern to you please let me know and we can explore other methods to fund your Insurance including personal cashflow, salary sacrificing etc. • We have recommended that you make super contributions above your 11.5% employer contribution each year to mitigate this issue. • Personally paid premiums will lower your personal cash flow. • Stepped premiums increase every year with age and will become very expensive as you get older. • Levels premiums are more expensive in the short term however more cost effective in the longer term. • The recommended policies cannot be claimed if the insured event is caused by suicide or attempted suicide within 13 months of the commencement of the policy. • The recommended TPD and trauma insurance is linked to your life cover. While this does lower the premiums, it means that any claim made on the TPD or trauma insurance will lower the life insurance sum insured by the claim amount. • Your total and permanent disability insurance policy will require you to be totally unable to work for a period (usually three or six months) before the insurer has sufficient evidence that you will be unable to work again. • If you are under age 60, total and permanent disability payments from superannuation will be taxed when paid to you. For details of what tax may apply to you, talk to your tax adviser. • Your TPD insurance is structured under an “any occupation” definition which is much more difficult to satisfy than an “own occupation” definition. This means that in the event you become totally and permanently disabled you must be considered to be unable to work in any occupation ever again, rather than your own occupation. • If your TPD insurance is assessed under the “Any occupation” definition, you will need to satisfy a condition of release in order to obtain those funds. • There is a 90 day waiting period before some trauma benefits can be paid. • Income protection benefits are considered taxable income and taxed accordingly. • There is a 90 day waiting period before income protection benefits are payable, after which your benefit will be paid a further 30 days in arrears. • Income protection is only payable until age 65. • If you purchase an insurance policy that differs from my recommendations, you risk financially committing yourself to an insurance policy that may not be appropriate for your needs and objectives. • Once the insurer has received your application, they will advise if further medical examinations or reports from your doctor are required. The cost of any medical reports and examinations are met by the insurer. • The insurance does not commence until the insurer has completed their assessment and issued the insurance policy. • You should be aware that if you do not fully disclose all relevant and material information to the insurer as required, the Insurer may be entitled to reduce their liability under your insurance contract in respect of a claim, or cancel your contract. • If an insurer chooses not to avoid the insurance policy or vary the sum insured, it can vary the contract so it is in the position it would have been in if non-disclosure or misrepresentation had not occurred. However, the insurer can only do so to the extent that any variations are consistent with what other reasonable and prudent insurers in similar circumstances would have done. Such variations are not applicable to a contract which has a surrender value or provides a death benefit. • Not all medical conditions are covered by your insurance policy. Definitions of the specified medical conditions covered under the policy are listed in the PDS. • Insurance policies inside superannuation are restricted by superannuation law. No benefits will be paid if the benefit could not be released to you from superannuation under the Superannuation Industry (Supervision) Regulations 1994 conditions of release for death, terminal illness, permanent incapacity or temporary incapacity. • The additional policy selections and/or features I have recommended are at an additional cost to you. • The premiums quoted may vary depending upon your family history, personal situation, personal statement provided, and underwriting assessments resulting in loadings and/or exclusions. • If you do not pay your insurance premiums by the time required by the insurer, your policy may be cancelled. • Policies held within superannuation: Please be aware that while there are benefits to holding insurance within superannuation such as lessening the impact on your available cash flow and providing tax deductions on the premiums you need to be conscious that you are drawing down on your superannuation funds prior to retirement. In addition there can be tax consequences on benefits paid out from within a super environment, you should seek taxation advice if you are concerned about this. Underwriting • There may be exclusions for specific activities or illnesses depending upon your family history or personal situation. • The insurance will not start until the insurer has completed their assessment and issued the policy. • The premiums quoted in the fees and charges section may vary depending upon your family history and personal situation. • Before you enter into a contract for insurance, you have a duty to disclose to the insurer every matter which you know, or could be reasonably expected to know, is relevant to the insurer’s decision to issue you with an insurance policy. If you do not fully disclose all relevant and material information to the insurer, the insurer may be entitled to reduce the claim amount or cancel your insurance contract. • You will be required to provide declarations in your application for insurance and personal statement. You should carefully consider each declaration before signing and where we complete these forms electronically, you need to confirm to me that the declarations are correct. You should be aware that you are legally bound Claiming benefits • In some circumstances such as suicide or attempted suicide, you will not be able to make an insurance claim. Please refer to the PDS for exact details and timeframes. • For an Indemnity policy, the income replacement benefit paid is based on the life insured’s average earnings in any 12 consecutive months of income over the past 3 years prior to the time of claim. • Although ‘any occupation’ cover is cheaper than ‘own occupation’ cover, it is also more restrictive as you have to meet the criteria of not being able to perform any job that you are reasonably qualified or trained for. • The TPD cover I have recommended is linked to your Life Cover. This means that if you are totally and permanently disabled and receive a payout, your Life Cover will be automatically reduced by the amount of the TPD payout. There is more information about the product features and risks in the PDS for each policy recommended, which I will provide to you. Approved Product List These policies have been selected from an Approved Product List (APL) which is prepared by Secured Wealth Advice Pty Ltd. These financial providers/products are regularly reviewed by Secured Wealth Advice Pty Ltd and are considered suitable for me to recommend to my clients.