Prescott Securities’ insurance adviser Suzie French says income protection, life and trauma insurances are priority personal finance strategies.
“We’ve found referrals and inquiries for income protection insurance, in particular, has grown significantly since the economic conditions have tightened,” Ms French said.
“In increasingly uncertain times, people are wanting some surety that if they become incapacitated in any way their finances are protected.
“Some people have seen their other assets fall in value in recent months and want to build their financial back-ups.”
Prescott Securities currently manages ongoing income protection claims for 25 clients totalling $113,000 a month and has also managed $1.1 million in trauma insurance cases in the past year.
“This is money that has proved to be vital to those affected,” Ms French said.
“However, there are still far too many people underinsured or have no cover at all which is very concerning.”
Ms French said a common mistake was for people, particularly families, to reduce their level of protection when tightening household spending. Premiums paid for personal insurance should not be considered a luxury or part of discretionary spending.
“Reducing insurance cover, or cutting it altogether, exposes you to even greater financial risk at the worst possible time,” she said.
“Penny pinching in the wrong areas may have devastating effects in the long term.
“Insurance can be flexible and tailored to your financial position. There are ways to reduce your premiums while maintaining essential cover and you need to discuss this with your adviser.”
Ms French practises what she preaches – she has a comprehensive package of personal risk insurance comprising death and disability cover, income protection and trauma insurance.
“Wealth protection is just as important as wealth accumulation. For most people, the ability to earn an income is their biggest asset so it makes financial sense to protect yourself,” she said.
“Too many people have this ‘it couldn’t happen to me’ attitude but it’s really important to protect your family and your lifestyle with insurance.
“Self-employed people and high-earning professionals need to exercise extra caution when insuring their income to ensure it is covered for the correct amount.
“Many people fail to take into account their total earnings when taking out income insurance, instead covering only their taxable income.
"Professionals with complex trust or superannuation structures in place, for example, need to consider the contributions they are making to these funds when calculating their total income.
“Similarly, salary-sacrificing arrangements need to be allowed for as part of a person’s insurable income.”
For more information please contact Suzie French at
