Its the Australian way when asked about contingency plans to respond with “she’ll be right”, but when it comes to protecting your income, she really won’t be right if you haven’t got a plan….
When you’re just starting out in the working world, it can be incredibly difficult to build up savings; even more so when you’re still out having fun and exploring the world.
Have you considered what you would do if you suffered a serious illness or accident? How would you cover your bills and other expenses? Nobody likes being indisposed, and its made so much worse when you have to use your hard-earned savings to cover living costs.
But the costs still need to be covered, and if you don’t have savings you might think of turning to your parents for support.
Did you think of what this will do to their financial position? What if your accident was a big one, that left your parents to take over responsibility for your debts and/or dependants? How would that affect their plans for retirement?
What if your parents just can’t (or won’t) be your safety net for income?
You might think that Centrelink will miraculously pull through for you, but consider this; even if you are eligible for assistance (bear in mind that assistance is means tested and considers the extent of your condition), the maximum disability support pension is only $670.90 per fortnight.
If we work this out per annum, that’s a total payment of $17 443.40; barely higher then minimum wage, which is great, if you only earn minimum wage, but if you’ve got a tertiary education or apprenticeship under your belt, you will definitely be copping a pay cut.
Lowering your income by this amount can be a massive issue with the amount of contracts we lock ourselves into; leases, mortgages, phone plans, data plans, car repayments and the like will offer no sympathy for your bad luck.
While this seems like a bleak outlook, there is a way to prevent yourself from getting into financial trouble if you do suffer from a serious illness or an accident.
By taking out wealth protection insurance, you can provide yourself with a safety net to protect you financially if things go wrong; to prevent the pressure and stress that can come with a loss of income.
Accidents happen, and there is nothing you can do about it; but if you fail to plan, you are planning to fail.
Come and see Geoff and Trung to build an insurance plan to help you cover your income needs in the event of illness or accident in the most cost effective and tax efficient way.