Estate Planning, Succession Planning & Insurances as a whole can be a bit of a minefield, particularly with everyone from Life Insurance Companies, General Insurance Companies, Direct Insurance Companies, On-Line Insurers, Industry Superannuation Funds & various financial institutions all trying to gain your attention &, more importantly, your money.

The Royal Commission has certainly brought the business practices of a number of shonky operators to the surface & I have no doubt that these investigations will give the financial services industry the shake-up that it deserves.

As consumers however, we are entitled to know exactly what we are purchasing & what the outcomes of those purchases will be. Consumers should be able to make informed choices & should not be pressured into buying anything from some high-pressure salesperson who simply have to achieve their monthly sales targets.

To get you started, here are a few questions that regularly crop up. If you have any more questions then please drop us as line.

Yes you can, or you can obtain it through a ‘Direct Insurer’, but neither of these providers will ask you the really important questions like:

* Would you like to consider the most cost-effective or tax-effective ways of owning your life insurance policy? or

* do you want to ensure that, when a claim is made on your policy, the Tax Office is not a beneficiary? or

* would you like to discuss some of your beneficiary options so that your family can take advantage of tax-free income streams? or

* would you like to discuss ways to make certain that your loved ones are the only people who will ever benefit from your life insurance policy?

You see, the role of the on-line & direct insurer’s staff is to ‘sign you up’ as quickly as possible. Unfortunately, as the 2018 Royal Commission into Financial Services has uncovered, too many Australians find out when it is too late that they have simply been misled.

For many people a simple Will may in fact be sufficient. Not everyone has a vast asset portfolio, or a complex estate, or children to look after, but we have found that as most of us get older our circumstances do become a little more complex. For example – some people have dependents with special needs; some people have an array of trusts or companies that hold their assets; and some people just want to make sure that only those that they choose will ever benefit from the assets that they have worked so hard for.

You may be but what Australians need to understand is that ALL income protection policies held within the superannuation environment fall under the category of ‘indemnity’ policies. This simply means that, when you make a claim, you must provide evidence of your income for the past 12 months (or up to the previous 3 years). If your income has actually reduced during that period (perhaps due to an extended period of time away from your place of employment) then the insurance company is not obliged to pay you the full amount that you were insured for. These types of policies also cannot assist you with the ongoing costs of rehabilitation, nursing care, emergency accommodation etc. because of legislation concerning superannuation’s ‘condition of release’.

That’s a wonderful position to be in & I am sure that your business partner feels exactly the same about you. However, after helping Australian SMEs for over 30 years, we have discovered the following:

* When a business partner/shareholder passes away the remaining owner is normally not as enthusiastic about developing a new business relationship with whoever his/her ex-business partner nominated in their Will (assuming that they didn’t die intestate);

* When a business partner/shareholder is incapacitated, & cannot return to the business, eventually the remaining business owner tires of doing 100% of the work for 50% of the reward;

* When a business partner/shareholder decides to leave the business he/she wants to be paid whatever their share is worth, & as quickly as possible, while the remaining owner normally wants a say in who (if anyone) is going to be the new part-owner.

* When a business partner/shareholder commits an offence (whether deliberately or accidently) the other partner/shareholder wants to ensure that they & the business are protected against any potential liability or litigation.

It’s true that many Australians have been adversely affected by dodgy sales tactics from unscrupulous insurance advisers & companies. In fact, I’m not aware of a single industry in this country that hasn’t had a rogue or two put a few blemishes on its reputation. Unfortunately the financial services industry has had its fair share, & what’s even more unfortunate is that when this happens in this industry, it’s normally to people who need the money for an emergency (i.e because someone has died or become incapacitated). In this regard we can only speak for ourselves. We are extremely proud of the fact that, to this day, we still have a 100% success rate of getting claims for our clients approved. Even with the many pro bono cases that we take on – 100% success. I don’t think there is any magic formula here – it is simply being thorough during the application stage & making sure that each of our client files is ‘claim ready’. Having very good relationships with key people at the insurance companies also works in our favour I am sure.

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