One of the most popular times to think about insurance is when you are getting married. Starting a new life with someone comes with all sorts of financial commitments, with one of them no doubt being how to support your spouse.

Insurance will offer financial security to your spouse should you suddenly pass away, or suffer an unexpected illness or injury, giving you peace of mind that they will not suffer hardship in the event.

Securing your family’s financial future, no matter what happens, is essential. Here’s how to start...

1. Get assurance through insurance

A recent Lifewise/NATSEM Underinsurance Report, revealed that 95% of families aren’t adequately insured, which means if the breadwinner becomes ill or dies, they can be left to rely on government assistance. Making sure you are adequately insured is one of the smartest ways to provide for your family. Insurance doesn’t just give peace of mind: Appropriate life cover can protect your family’s financial security, giving them one less thing to worry about at a difficult time.

2. Do it sooner rather than later

Insurance isn’t just for people who have partners and children. If you are young, fit and single, insurance can pay for your care if you are injured, in an accident or become seriously ill.

Taking out life insurance when you are younger can also make good financial sense. Policy costs increase as you get older, so it might be possible to lock in more affordable rates when you’re young and healthy.

Plus, if you take a policy out when you are strong and in good health, it has to remain in place even if you become seriously ill and difficult to insure. So, unless you are wealthy and have the means to cover your family’s financial needs if you aren’t there, it makes sense to be adequately insured.

3. Unpick the policies

Understanding the different types of insurance, and which ones are right for your circumstances, is a great starting point:

• Life Cover: Pays beneficiaries an agreed amount of money if the insured person dies. 
• Total and Permanent Disability cover or TPD: Helps pay the costs associated with care and debt repayments if you are permanently injured.
• Trauma cover: Helps with the cost of treatment for a long-term illness or injury. 
• Income protection: Provides money to replace income if you can’t work because of an injury or illness.

4. Count the cost

Now you know the different types, there are two things to consider when working out the level of cover you should take out:

a. How much can you afford?
There’s no point in getting into financial difficulties trying to pay high premiums. Work out your budget and how much you can divert into insurance. If you need help, seek professional advice.

b. How much money will you or your family need if you end up having to make an insurance claim?
List your crucial bills and financial commitments to give you an idea of how much your family will need to live comfortably. For example:

• Mortgage
• Childcare fees
• School fees
• Council rates
• Strata fees

5. Tick the legal boxes

Finally, if your insurance policy has to be used, it’s important to smooth the process by making sure you have a current Will.

While you can use a lawyer to draw up your Will, the Public Trustee in each state also provides a Wills service. Fees vary from being free in Queensland to being based on a sliding scale depending on the capital of your estate in NSW.

The Public Trustee can also help you with arranging power of attorney, which can be just as important as having a current Will.

Power of Attorney means you give an attorney the legal authority to look after your financial affairs on your behalf if you are no longer able to do so, for example, if you are too ill or injured to make decisions. It means someone can still access your funds and activate your insurance policies to make sure money is released to provide for you and your family.

To speak with one of our Planners about the insurance options available to you in light of your pending nuptials, please call 02 9524 6711 or email info@southernadvisory.com.au

Source: www.colonialfirststate.com.au

Are you planning on tying the knot? 


It pays to go into love and money matters with your eyes open... 

Here are some tips on managing finances with your partner once the wedding is over.



Talk to your partner about money

• Relationship goals
  

Work out your relationship goals with your partner. Consider what goals you share like buying a home or having a baby.

• Current financial situation
  

Take stock of your income and expenses, assets and debts. Start thinking about ways you may be able to reduce spending so you can save for your goals, and how you can reduce any debts faster.

• Attitudes to spending and saving
  

Are you a spender or saver? What about your partner? Your background and experiences will influence how you think about money. Understanding how your partner approaches financial matters will make it easier to create a money plan that suits you both. Try to find common ground so that you are working together.

• The financial controller
  

Who will handle the finances? Will one person look after household expenses, mortgage and savings, or will you share the responsibility? Make sure you're both happy with the decision.

Take action together

If you're serious about sharing your finances, here are some things to consider:

Use both your names -

• Put both your names on services like electricity, gas and water. This will make you equally responsible.

• Putting joint assets and liabilities, like your home and the corresponding loan, in both names means you will both have an ownership interest in the asset and both be responsible for the debt.
  
• Think twice before putting your name on a loan that will only benefit your partner. 
  

Share costs - 
Insurers will often give family discounts on multiple policies, such as for Life, TPD or Trauma insurance.

Plan for a shared future - 

• Get your partner to work with you on a household budget. This will help you see how much money you can save or invest in your shared goals.
  
• You may be able to split off some of your super contributions to your spouse. This may be beneficial to your retirement plans. If you have a non-working spouse you may also be able to claim a tax offset for after tax spouse contributions.
• Make a will and keep it up to date. 

Review Your Beneficiaries - 
Go through each of your accounts (including superannuation and insurance) and ensure the beneficiaries listed are accurate and make sure your estate is divided in the way you wish it to be.

Know the facts about sharing money

Don't be blinded by love - be aware of how much money is coming in and going out. Here are some facts you may not be aware of:

• A joint loan doesn't mean you're only liable for half the debt. If your partner defaults, you may be liable for the whole amount, including fees, interest and charges, even if your relationship ends.
• If a utility service such as electricity or gas is only in your name, then it's your sole responsibility to pay the bills.
• Think carefully before you guarantee a loan for your partner or family members. If things don't go to plan and the borrower can't repay the money, you could be asked to repay for any loan you've guaranteed, including fees, interest and charges. For example, if the guarantee is secured against your home you could risk losing it.
• Ignorance is not a defence. Signing papers you know nothing about, just because your partner told you to, does not make you any less liable for any loans or guarantees you may have agreed to.

Take care of yourself

If you earn less income than your partner, you may feel you don't have a right to make decisions about where the money goes. Talk to your partner about how you feel. You should work as a partnership, including when it comes to money.

• Get a prenup
  

If you have assets to protect or children from a previous relationship to support, you may consider entering into a binding financial agreement (BFA), also known as a prenup. BFAs can help if you're worried about who should get what if the relationship ends. They are only binding if you have both signed the agreement and received legal and financial advice before signing.

• Get organised
  

- Make a list of all your accounts, loans, investments and insurance.
- Keep all your financial information, including receipts and records for tax, in one place so you both know where they are.

•  Get informed

Don't sign anything you don't understand. Always read documents thoroughly.

• Get professional advice 

Speak with one of our Planners at Southern Advisory to discuss your situation and to plan for your future together. Contact Us on 02 9524 6711 or info@southernadvisory.com.au

Source: www.moneysmart.gov.au