Traditional financial planning appears quite complex however in its basic form really should be very simple. Financial planning is all about save more, spending less and protecting what you’ve got with risk management strategies and personal protection plans.
Unfortunately, bad things do happen to good people and many are just not prepared for the unexpected. The cost of an accident or illness is enormous and if you do not have adequate protection or a risk management plan in place you face the prospect of losing everything you have and more.
For example did you know…
- 3 out of 4 Australians will suffer a major illness within their working Life
- One third of all women will suffer cancer at some stage in their life
- One quarter of all men will suffer cancer at some stage in their life
- Over 1000 people will die on our roads this year many more will suffer serious injury
- Nearly 500,000 serious injuries that will require hospitalization over the next 12 months
- There were 131,010 serious WorkCover claims last year– many more went unclaimed
- One quarter of all serious injury claims required more than 12 weeks off work
- Average superannuation balance for a current working individual is $79,000
- Less than 1 in 4 people have sufficient savings to survive 2 months without income
Too often in Australia personal tragedy is made even harder by the simple admission: “I have no insurance.” Whether we’re talking about [protection to cover the loss of our homes, belongings, cars or more valuable assets such as ourselves, our family and our ability to earn an income, Australia has an ongoing under-insurance epidemic.
Reasons for not buying protection are obvious and as it is often seen as a grudge purchase, a perceived lack of benefit for money invested, and more pressing demands on the budget. Not to mention the old “wing it and worry about it later” approach. Or “it won’t happen to me” attitude.
When faced with these circumstances, people firstly use their savings, then their borrowings, then they rely on family and friends, and lastly they sell their assets and look for charity. Most people when faced with these situations find themselves with inadequate or no protection
The amount of personal protection you need will vary according to circumstances however an amount that would cover any non tax effective debts would be a good starting point. Then you would need to add enough to replace your income so that you did not need to work until you had fully recovered, plus a bit more if you think a lifestyle change may be in order.
People need comprehensive personal protection – your family and financial future is totally dependent on your ability to continue working and investing!