InsuranceOnly 5% of Australian families have adequate insurance*

Speaker’s name Title/departmentApril 2013

3April 2013

Disclaimer

This information was prepared by Securitor Financial Group Ltd, ABN 48 009 189 495 AFSL & Australian Credit Licence (ACL) 240687 (Securitor) and is current as at January 2013.Material contained in this presentation is an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.This presentation contains general information only and does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. All case studies and examples used in this presentation are for illustrative purposes only and nothing in this presentation should be construed as an indication or prediction of future performance or results.Any taxation position described in this publication should be used as a guide only and is not tax advice. You should consult a registered tax agent for specific tax advice on your circumstances. As the rules associated with the super and pension regimes are complex and subject to change and as the opportunities and effects differ based on your personal circumstances, you should seek personalised advice from a financial adviser before making any financial decision in relation to any matters discussed in this presentation.

* Lifewise/NATSEM Underinsurance Report 2010

4April 2013

Agenda

Insurance and why it is importantTypes of insurance options availableInsurance: inside or outside of super?SummaryNext stepsQuestions

Insurance andwhy it is important

6April 2013

Having a Plan B

Know the odds...You probably have car insurance. Most of us do. But why are we chronically underinsured when it comes to our most precious of all assets?

– One Australian dies from a heart attack every 51 minutes1

– It is estimated that more than 43,000 people died from cancer in 20102

– 95% of families do not have adequate levels of insurance3

1. Heart Foundation, statistics 20102. The Cancer Council Australia, Facts and Figures 20103. Lifewise/NATSEM Underinsurance Report 2010.

7April 2013

Why is insurance important?

How will your family financially cope without you?If death or disability occurs, will your family have enough funds

to:– continue their current standard of living (including servicing

existing debt), and – pay medical or funeral bills

If a serious injury occurs, could you pay for:– hospital costs and ongoing treatment– time off work – living costs for you and your family until you recover

Ideally, you will have planned to help ensure there is enough cover to cope with these situations.

What types of insurance are available

9April 2013

What types of insurance are available?

Term LifeTotal and Permanent Disablement (TPD)Living InsuranceIncome Protection (IP)

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Term Life

Pays a benefit in the event of death.The benefit is usually in the form of a lump sum.Some policies may include additional cover for terminal illness, permanent disability and/or specified medical illnesses.

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Term Life Case Study: Sam & Susan

Sam and Susan have 3 children, all of school age. Susan works part-time as a physiotherapist. They have a mortgage of $300,000Two years earlier, Sam took out a life insurance policy of

$500,000.Whilst driving home from work one night, a major accident on the freeway resulted in a four car pile up.Tragically, Sam was killed in the collision.

The insurance proceeds helped pay off the mortgage with enough left over for investment to cover the children’s future school fees.

Example only

12April 2013

Total & Permanent Disablement (TPD)

Pays a benefit if the Insured Person becomes totally and permanently disabled.The benefit is usually in the form of a lump sum and is received when the insurer’s definition of TPD is satisfied. The cover may assist with medical and rehabilitation costs and provide you and your family with financial security. 

13April 2013

TPD Case Study: Sam

In this case study Sam survived the accident but is now a paraplegic.Sam’s insurance cover included “own occupation” definition for the TPD benefit.As Sam worked as an ambulance officer he can no longer drive the ambulance vehicle or assist with manual handling of patients.Sam submits an insurance claim and, as he can no longer work again, he is paid out the sum insured lump sum applicable to the TPD benefit.He now intends to seek professional advice from a financial planner on how best to invest the proceeds.

14April 2013

Living Insurance

Pays a benefit if the Insured Person suffers a specified medical event such as cancer, stroke, heart attack or loss of a limb.You can use the benefit as you wish, for example to pay for expenses associated with medical treatment, mortgage repayments or give you time needed to recover.A lump sum payment is made if you suffer one or more of the specified medical events.

15April 2013

Income Protection

Income Protection provides a regular monthly income to a person who is disabled and is unable to work because of sickness or injury.Depending on the product provider, you can receive up to 80% of regular monthly earnings in the event of sickness or injury if you are totally disabled because of sickness or injury and unable to work, orA partial disability benefit if you are on reduced duties and earning less than before your disability.

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Income Protection Case Study: Matt & Joanne Matt, 35, is married to Joanne and they have two young children.He works as a foreman on a construction site and earns $75,000 p.a. or $6,250 a month.Matt has a mortgage on the family home and has been worried about his family’s ability to cope should something happen to him. Matt decides to take out income protection.A few years later, Matt is diagnosed with a blood vessel malformation – a condition that puts pressure on the lower spinal nerves and reduced his mobility. He required surgery and physiotherapy as well as a long period off work for rehabilitation.After waiting the 30 day waiting period, Matt receives $4,687.50 (75% of $6,250 per month) which allows him to continue his mortgage payments and meet daily living expenses.

17April 2013

Who may be covered with life insurance?

Employees and self-employedHomemakersMedical ProfessionalsPeople in Mining, Oil or GasBusiness insurance – Key Man/Principal

Insurance: inside or outside of super

19April 2013

Insurance: inside or outside super?

It is important to be smart about the structure of your insurance, so that the dollars you pay for premiums work harder for you.Whether you should hold your insurance inside or outside of super depends on your personal circumstances and needs.By choosing the right combination of insurance inside and outside super for you, not only can you have the appropriate insurance cover for your peace of mind, but you can do it in a cost and tax effective manner.

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Tax treatment at a glance

* Deductions for own occupation cover may only be partially deductible.

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Insurance: inside or outside super? Case studyJohn aged 36Marginal tax rate 38.5% (including Medicare levy)Has $700 pre tax salary to purchase Life & TPD (any occupation) insurance coverNon-smokerStepped premium quote requiredWhat cover can he purchase ?

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Insurance: inside or outside super?Case study...

Insurance outside Super

Insurance in Super

Pre-tax salary available to purchase insurance $700 $700

Less tax @38.5% ($269.50) (n/a)

Net premium available $430.50 $700

Sample life & TPD cover purchased $352,000 $573,000

Sample additional insurance cover purchased $221,000

Summary

24April 2013

Summary

We often say... it won’t happen to me … In 2011, we paid out over $127 million in claims to over 1,400

customers.That’s:

– Around $74 million to help families cope with the loss of a loved one;

– $41 million to help our policyholders manage through sickness and injuries;

– Regular payments totalling more than $12 million paid to our income protection customers when they are unable to work due to sickness or injury

A range of smart and affordable insurance options to match your life stage and financial circumstances.

25April 2013

Next steps

Evaluate or review your insurance needs – consider the following factors:– Your age– Your family situation– Your income and that of your spouse/partner– Your debts (house and other)– Your existing savings and investments– Your financial and lifestyle goals– Your health and that of your spouse/partner

Speak to your Westpac Financial Planner about:– Your individual circumstances – The type and level of cover that is right for you.

Questions?