Financial Planning

Building a free and independent lifestyle needs more than just a drive to succeed and the skill to make it happen. It takes one of two other ingredients; good luck or good planning.

The dream to be rich, free and happy

We all have different definitions of success. For most of us it is the desire for financial independence, an aspiration to choose our own path in life and ultimately, a drive to achieve a sense of fulfillment and happiness.

Chances are you have already taken the right steps toward these goals:

• through education
• buying your first home
• establishing yourself in a rewarding career or business
• starting a family
• implementing an investment plan, or
• enjoying life experiences such as travel, sporting activities and entertaining friends.

It’s natural to assume that we can control our progress toward these and other goals through our motivation, hard work and perseverance…and often, if we are lucky - we do.

You are free to choose luck, and hope that a tragedy doesn’t strike and you won’t suffer from a serious illness or injury, or that unexpected death won’t disturb the secure and comfortable life you want for you and your family. But fortunately, you are also free to choose a more financially secure future.

Why not take the opportunity right now to explore your options and make a conscious choice about your future, rather than leaving it to chance?

No one plans to get sick, injured or to die prematurely, but you can plan to provide a cash cushion if you or your family are ever unfortunate enough to be affected by these events. It’s all about retaining control of your financial independence even if you lose the ability to earn a living through your own efforts.

Through effective planning and provision for events that threaten your life, you can safeguard the financial future for you and your family. It is within your control.

The four pillars of protection

You can effectively and economically immunise your financial future against these risks using a combination of four basic types of cover:

1. Income protection insurance to provide a replacement monthly income if you are temporarily sick or injured.
2. Critical illness insurance to provide a lump sum of cash if you are diagnosed with one of many specified medical conditions, such as cancer, multiple sclerosis and heart attack.
3. Total and permanent disability insurance to provide a lump sum of cash if you become totally disabled and are unable to work ever again.
4. Life insurance to provide a lump sum of cash upon death or terminal illness.

A combination of these insurances can give you the financial resources to maintain or adjust your lifestyle and ensure that you are able to care for yourself and your family with confidence and dignity.

Good economic sense

The advantage of owning personal insurance is that you can make relatively small payments and instantly create a huge pool of contingency capital and income. When you compare this concept to the alternatives, it represents a vastly superior economic proposition:

• saving for such contingencies yourself may take years and you will only ever receive dollar for dollar plus any investment returns
• relying on social security may only provide you with a fraction of the income you need or are accustomed to, and
• dependence on relatives or friends would cost nothing, except maybe your dignity, but is unlikely to be a secure or sufficient long term source of income.

A skilled planning partner

Putting your protection plan together is best accomplished with the help of a professional insurance adviser who specialises in risk management. Working together can be a rewarding experience as you create security and protection around the financial future of those you love. It may be the most significant step toward financial freedom that you ever take.

More than skin deep

The ‘bronzed Aussie’ is a cultural cornerstone. We’ve long associated the icon with all that’s Australian; the outdoors, the beach, and an active lifestyle.
It’s virtually imprinted on our national psyche. 

So it’s no surprise that, despite medical research and mortality statistics that suggest otherwise, 50% of Australians still believe a tan is healthy . 

Glowing – with good health?

Tanning is a sign of skin damage – a response to ultraviolet radiation (UVR).
It occurs when, due to UVR exposure, the skin cells produce extra melanin (the pigment responsible for the skin’s natural colour). The excess pigmentation gives the skin a darker appearance; what we call a ‘tan’.

UVR exposure – be it from the sun, or via a solarium – poses serious health risks. These include sunburn, premature aging of the skin and optical damage. 

It is also the most significant cause of skin cancer in Australia . 

A sunburnt country

Australia has one of the highest incidences of skin cancer in the world. In fact, two in three Australians will be diagnosed with skin cancer by the age of 70 .

The good news is, early detection can lead to a positive prognosis in most cases. 

Non-melanoma 

Basil Cell Carcinoma (‘BCC’) and Squamous Cell Carcinoma (‘SCC’), generally referred to as ‘non-melanoma’, are the more common type of skin cancer.
They form in cells near the skin’s surface (or ‘epidermis’). Symptoms may include sores that won’t heal, the appearance of new growths, or changes to existing warts or moles.
Non-melanoma is considered less dangerous because it typically doesn’t spread to other parts of the body. Even so, treatment is still necessary – usually in the form of removal, ointment or radiation therapy.

Melanoma

Melanoma is the less common but more serious form of skin cancer. It occurs when the skin cells produce excessive levels of melanin – to the extent they begin to grow abnormally and invade surrounding tissue.
Early stage melanoma doesn’t usually present with symptoms, so it’s important to conduct regular skin checks using the ‘ABCD’ guide :

• Asymmetry: Are any moles or spots asymmetrical?
• Border: Do any moles or spots have blurry or

jagged edges?
• Colour: Do any moles or spots have more than one shade of colour?
• Diameter: Are any moles or spots greater than 6mm in diameter?

Moles or spots that satisfy any of these criteria should be checked by a doctor.
Treatment for melanoma depends on the patient’s age, general health and how advanced the condition is. It may include surgery, radiotherapy, chemotherapy and immunotherapy.

Protect yourself

The old adage echoes true in this case; prevention really is better than cure.
Here are some simple ways to protect yourself against UVR exposure – and help reduce your risk of skin cancer :

• Stay in the shade: URV is strongest during from 10am – 2pm (or 11am – 3pm during daylight savings time). Try to avoid the sun during these periods.
• Choose protective clothing: Wear clothing that covers up as much skin as possible, especially around the shoulders, arms and legs.
• Cover up with broad-brimmed hat: Skin cancer most frequently occurs on the neck, ears and face. A broad-brimmed hat with at least a 7cm diameter can help protect these areas.
• Wear sunglasses: Protect your eyes with wrap-around sunglasses that meet the Australian Standard (AS 1067).
• Apply sunscreen: SPF 30+ broad spectrum sunscreen can filter out 97% of UV rays. Remember to apply 20 minutes before sun exposure, and reapply every two hours.

Get covered

These tips can help protect you from UVR exposure, thereby reducing the risk of melanoma. But in the event that skin cancer did occur, how would you manage?

Critical Illness Cover can protect you – and your loved ones – from the financial consequences.
A Critical Illness claim provides a lump sum payment. This money can be used to fund medical costs, keep up with mortgage repayments and pay for day-to-day expenses – allowing you to focus on your recovery.

Insurers today will pay full benefits for more severe forms of melanoma. Partial payments are typically also available for early stage melanoma in the ‘premier’ versions of their contracts.

Life events trigger reminder to update beneficiary nominations

When major life events occur in your life, such as divorce or starting/ending a de facto relationship, updating your nomination of beneficiary for your superannuation fund may not be high on your priority list.

A binding nomination of beneficiary expires three years after the date you sign and date the form. Similar to a Will, a binding nomination becomes invalid when certain changes occur to your family circumstances which result in the nominated beneficiaries ceasing to be dependants. 

When the nomination expires or becomes invalid, it is no longer binding on the trustee and the superannuation fund’s rules often set out how death benefits are to be paid in these circumstances. This may mean that the trustee may pay your death benefit in a way that you did not intend.

Luke and Sarah’s story
Luke and Sarah have been happily married for ten years. Four years ago, Luke decided to make a binding nomination of beneficiary in favour of Sarah. Luke made this decision knowing that his son from his first marriage, who does not keep in contact, would receive a small portion of the death benefit.

Luke leads an active life and, as often happens, he did not make a Will or renew his binding nomination after it expired. When Luke died, the lack of a binding nomination and a Will had significant financial impact on Sarah because the Trustee paid his death benefit to his estate. Under the law of intestacy, Luke’s son received approximately half of the death benefit (rather than a few thousand dollars) from Luke’s estate.