Life Insurance

[minux]

Just wondering how many of you people out there have life insurance and how much you are paying for what cover?

I only just took out a policy covering me for 750k and is costing $62 month.

Want to make sure I am not paying craploads more than others.

[Tom_1569]

750K, you may find the missus putting crushed glass in your meals for that amount, better lower it quickly

Me, No life insurance at all, havent even thought about it, too young.

[minux]

750K, you may find the missus putting crushed glass in your meals for that amount, better lower it quickly

Me, No life insurance at all, havent even thought about it, too young.

She is insured for the same amount.

Your never to young to think about these things...I am stupid for waiting until now to cover myself.

[Shounak]

Just wondering how many of you people out there have life insurance and how much you are paying for what cover?

I only just took out a policy covering me for 750k and is costing $62 month.

Want to make sure I am not paying craploads more than others.

Minux, the most efficient and tax effective way of paying for life insurance (assuming you're earning over $30,000pa) is through your super.

If you're with an industry super fund (which are absolute rubbish) you're most likely being charged quite a bit for absolute crap. I would suggest you look at some of the private providers such as Colonial for a quote on life insurance, that way you'll be paying for it with money being taxed 15% instead of whatever tax rate you're on.

Plus with the stock market dipped, it's the best time to get into a diversified share fund.

Btw, the funds do not charge a flat 4% on all contributions + trailing commissions when you enter with a direct investment advisor. You get the benefit of a well managed fund without the fee's. I don't know why anyone puts their money anywhere else.

[Tom_1569]

She is insured for the same amount.

Your never to young to think about these things...I am stupid for waiting until now to cover myself.

Both insured for the same amount.... WATCH YOUR KIDS!!! lol.

Im only 17, and dont even think you can get life insurance until your 18. Ill be waiting to i get a decent job before I think about it.

[minux]

Minux, the most efficient and tax effective way of paying for life insurance (assuming you're earning over $30,000pa) is through your super.

If you're with an industry super fund (which are absolute rubbish) you're most likely being charged quite a bit for absolute crap. I would suggest you look at some of the private providers such as Colonial for a quote on life insurance, that way you'll be paying for it with money being taxed 15% instead of whatever tax rate you're on.

Plus with the stock market dipped, it's the best time to get into a diversified share fund.

Btw, the funds do not charge a flat 4% on all contributions + trailing commissions when you enter with a direct investment advisor. You get the benefit of a well managed fund without the fee's. I don't know why anyone puts their money anywhere else.

We are with private super. Might have to make an appointment to see our financial guru.

Thanks Shounak.

[DANNY8]

I've been thinkin bout getting it, but that's as far as it's got.

[Rufus®]

We've got 400k for $30 something a month, so its about on par.

[Shounak]

We are with private super. Might have to make an appointment to see our financial guru.

Thanks Shounak.

No worries mate. Did you open the super fund through your financial advisor? If so, they're getting a nice chunk of the trailing commission, plus most advisors aren't independant in that they'll offer you what serves them the best deal.

I'd suggest looking through the SoA because financial planners can often rort their customers beyond the fee's, but thankfully it all comes out in the SoA.

For anyone else. If you don't put money into your super, you'll end up with nothing once you're older. With the ageing population, the government will not be able to support the retiree's with the same level of cash and care that they do now.

If you earn under $58,000, the government will throw free money into your super. If you earn less than $28,000 they'll match $1000 put in by you with $1500. Even if it grows at a modest 9% (worst case scenario), in 40 years it will be $78,523.55.

Super is important. Unlike the previous generation, you have the benefit of hindsight and you don't have a guaranteed promise of support.

[minux]

No worries mate. Did you open the super fund through your financial advisor? If so, they're getting a nice chunk of the trailing commission, plus most advisors aren't independant in that they'll offer you what serves them the best deal.

I'd suggest looking through the SoA because financial planners can often rort their customers beyond the fee's, but thankfully it all comes out in the SoA.

For anyone else. If you don't put money into your super, you'll end up with nothing once you're older. With the ageing population, the government will not be able to support the retiree's with the same level of cash and care that they do now.

If you earn under $58,000, the government will throw free money into your super. If you earn less than $28,000 they'll match $1000 put in by you with $1500. Even if it grows at a modest 9% (worst case scenario), in 40 years it will be $78,523.55.

Super is important. Unlike the previous generation, you have the benefit of hindsight and you don't have a guaranteed promise of support.

My sister in law setup our super, all i know is it seems to be working well. I leave that side of things to Kaye and her sister. Costs us nothing to keep it managed under her guidance. I know we have setup salary sacrifice to inject extra into our super each month. That has made a massive difference in figures in the past 12 months alone.

[Kikki]

All through our super here.

[jules]

If you're with an industry super fund (which are absolute rubbish) you're most likely being charged quite a bit for absolute crap.

can you explain that a bit more?

when i asked him, my mate who works in funds managements for a well known, large private insurance provider advised me not to go with his company's fund but with an industry fund, as they charge less fees and would give a better return.

[Shounak]

can you explain that a bit more?

when i asked him, my mate who works in funds managements for a well known, large private insurance provider advised me not to go with his company's fund but with an industry fund, as they charge less fees and would give a better return.

Two aspects to my answer.

1. Return. Industry super funds brag about not paying commissions to their advisors, their returns don't even compare to the private funds. On occasion they may equate, but you're always much better off with a private fund. The customary high percentage commissions private funds charged can very easily be credited right back to you, which essentially means that you only pay about 0.4-0.7% trailing commission per annum, to ensure they're doing their job right.

2. Administration costs. Anyone in an industry superfund, check your last statement and tell me how much you pay in fee's. They charge a crap load. You're always better off paying a small trailing commission (which you don't see gone) than pay those massive fee's.

Private funds are generally much larger, have lower transaction costs and more expertise. They play with a larger pool and have a lot more to lose.

Your friend was kind of right. But to get around those fee's, you can go with someone like investsmart.com.au. That way you get the performance of a private fund, without the fee's. It is as simple as that.

I'm not telling anyone to change, just do some research. If you move to a better fund, you will grow yourself heaps of money in the future. It's pretty easy to retire on about $150,000pa, just check some super calculators.

[sixshooter]

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[VrWagz1]

I got it, but i got trauma, life(1million) and wage. Its about 200 month, im unsure of the seperate costs, but its the trauma and wage thats the expensive bit. The miss's tells me you get what you pay for, if you pay more you will generally get more options on your policy as to what it will cover, like suicide and odd sircumstances, and the trauma will cover you from everything from a lost finger to heart attacks and illness. I tried super but they would only do life and would only cover me for a few hundred thousand. It all depends what you want to pay for, call your insurance broker if your unsure of things, or want a better deal, if you've got a good one they will take the time to talk to you, cause life and trauma poilicy's are worth a fortune to them(commissions ect.), compared to other general stuff.

[evil_monkey]

wtf is 750k for a life ? you can probably barely buy a house n a car for that **** its not like your set

[Shounak]

I laugh at that... "same level of cash and care that they do now"

In forty years time 78 K would be worth about 5 K if you factor in that things double in cost every 10 years... look at petrol about $0.80c a litre back in 2000 around $1.60 now.

Buying a place to live in first then worrying about extra savings for retirement should be the order of things. People need places to live, populations will keep increasing and there will always be a demand for housing. Stock market fluctuate... hope like hell it don't crash when you're just about to retire and take all your life savings with it.

In real terms it's worth about $30k, but that's assuming growth at the current cash rate with inflation at 3%. Properly invested, it will most likely be worth much more.

Buying a place should be a priority, but you can chew gum whilst walking. The government offers numerous tax concessions that should be utilised, I'm not suggesting bucketing all of your cash into super. Just keep an eye on it.

Any good financial planner will tell you to move your super into a more stable cash fund about 10 years before retirement. Or at least go to a low/moderate growth/volatility option. The people who are losing their money now decided to take advantage of the huge increases in the market, but were whinging when the risk caught up with the return.

If a FP doesn't tell you to go conservative in the years before your retirement, they don't deserve to be practising.

Petrol is not a good indicator of the inflation rate. The market basket isn't perfect, but it's much better.

[Cordelia calais]

We got life insurance as soon as we had the kids, we added it on to our super and half goes to the kids and half to the surviving parent, you are right though it is never too early to get life insurance and I think if you have kids and dont have life insurance you are iresponsible! We have also planned and payed for our funerals, I know, I know, I am only 30 but these things cost a **** load of money and I dont want my children to be concerned with these things, just incase!!

[minux]

wtf is 750k for a life ? you can probably barely buy a house n a car for that **** its not like your set

It is more than enough to give time to get debst out of the way etc. If i died tomorrow I'd be leaving my partner with near 1.2 mill of debt. With life insurance at least she has a chance to sell property to cover the shortfall or pay for things until she can replace me.

[Bravotwozero]

I laugh at that... "same level of cash and care that they do now"

In forty years time 78 K would be worth about 5 K if you factor in that things double in cost every 10 years... look at petrol about $0.80c a litre back in 2000 around $1.60 now.

Buying a place to live in first then worrying about extra savings for retirement should be the order of things. People need places to live, populations will keep increasing and there will always be a demand for housing. Stock market fluctuate... hope like hell it don't crash when you're just about to retire and take all your life savings with it.

If you wait until you own your own home to plan for retirement, it will be too late.

[Reaper]

I laugh at that... "same level of cash and care that they do now"

In forty years time 78 K would be worth about 5 K if you factor in that things double in cost every 10 years... look at petrol about $0.80c a litre back in 2000 around $1.60 now.

Buying a place to live in first then worrying about extra savings for retirement should be the order of things. People need places to live, populations will keep increasing and there will always be a demand for housing. Stock market fluctuate... hope like hell it don't crash when you're just about to retire and take all your life savings with it.

You are not looking at the overall picture. Shounak is on the right track here. Over the longer term inflation sits at around 3.5%. Over 7% years the share market all ords usually bring a return around 9 - 12% above the cost of inflation. Of course some years (like this one) are below this but on average that is the band - has been like that for 100 years.


The items that make up inflation fluctuate along the way, some go up whilst others go down. Don't believe me??? Eletrical goods, white goods, most consumer items have all fallen substantially in price over the last decade or so. I deal with building developers (domestic) and hands on builders. Most are reporting that construction costs have stayed stagnant over the last 5 or so years. Labor costs have increased however material costs (particularly in fittings and fixtures) have decreased by a similar amount. Of course land has risen substantially which has driven down overall housing affordabilitiy.

Reaper

[vztrt]

I laugh at that... "same level of cash and care that they do now"

In forty years time 78 K would be worth about 5 K if you factor in that things double in cost every 10 years... look at petrol about $0.80c a litre back in 2000 around $1.60 now.

Buying a place to live in first then worrying about extra savings for retirement should be the order of things. People need places to live, populations will keep increasing and there will always be a demand for housing. Stock market fluctuate... hope like hell it don't crash when you're just about to retire and take all your life savings with it.

I'll agree with that, houses are long term investments that will yield good returns (thats if you actually concentrate on paying the thing off).
You can have bag loads of money in the bank but thats a waste as its not doing anything. The only reason I contribute more money into my super is I have a bigger pay packet at the end of the month so better in my pocket then the governments. But my work pays 12% of my wage to the super fund so I salary sacrifice 6% and thats not a bad return.

Oh Minux I do have life insurance but its paid for by my company and its apart of the super package, so probably wont be much.

[CSP]

I would never pay for life insurance for myself because personally, I get NOTHING from it.

Trust me, Ive heard all the peace of mind arguments before, blah blah blah. But once Im dead I couldnt give two hoots who has to deal with everything! It sure as hell won't be me...

The only reason I have it is because my employer pays for my Private Health Insurance, Death Insurance and Total Permanent Disability Insurance.

As far as Superannuation goes, it will be a nice little bonus when I retire. My retirement income will be from rental properties and my Defence pension

[jules]

Your friend was kind of right. But to get around those fee's, you can go with someone like investsmart.com.au. That way you get the performance of a private fund, without the fee's. It is as simple as that.

i'll look into it. ta for the info.

I laugh at that... "same level of cash and care that they do now"

In forty years time 78 K would be worth about 5 K if you factor in that things double in cost every 10 years... look at petrol about $0.80c a litre back in 2000 around $1.60 now.

conventionally, you would talk in terms of present day values.

although $78k would not be worth as much in 10 years as today, in reality it would grow in a super fund at a rate equivalent, or i would hope, greater than the discount rate (inflation, in this case).

Buying a place to live in first then worrying about extra savings for retirement should be the order of things. People need places to live, populations will keep increasing and there will always be a demand for housing. Stock market fluctuate... hope like hell it don't crash when you're just about to retire and take all your life savings with it.

you'll find that historically, the stock market has outperformed the housing market (though not over the past 10-20 years) and particularly if you are using super, rather than post-tax income. you could in theory do very well by renting and investing the balance in the stock market. you could also debate the issue endlessly, as there as so many variables. however it's not a given that housing is a better option, financially.

[evil_monkey]

It is more than enough to give time to get debst out of the way etc. If i died tomorrow I'd be leaving my partner with near 1.2 mill of debt. With life insurance at least she has a chance to sell property to cover the shortfall or pay for things until she can replace me.

yeah thats cool.

but i was more refering to another post mentioning that you should lower it in case she decides to knock you over the head