March 2015 Newsletter 

In this edition:

Welcome

New ATO data matching programs

Potential ban on direct borrowing for SMSFs

Protect your family from life's surprises

New ATO powers to protect employee's superannuation entitlements

Protect your family from life's surprises

by Debbie Adams

A recent survey conducted for the Financial Services Council by Rice Walker found that only 4% of those with dependants have sufficient life insurance (1). This has the potential to greatly affect families who aren't covered if one parent were to die.

Sufficient life insurance is generally accepted to be at least 10 times the insured's earnings. But alarmingly, six in ten people with dependants don't have enough life insurance cover to look after their loved ones for more than one year if they were to die (2).

Having been in the finance industry for a number years, I believe these alarming results could be due to a lack of awareness about the types of life insurance solutions available and the cost of purchasing cover.

Many people insure their home and their car, but fail to insure their most important asset, their ability to produce an income, which is also their life. People fail to realise the value of their 'working' life. It supplies the capital that fuels the lifestyle that you and your family enjoy, not just now, but well into the future.

The table below demonstrates just how valuable an 'asset' your ability to produce an income is. It shows your potential earnings over 20 years and takes into account annual CPI increases (3% pa) and pay increases (3% pa).  The table represents your gross income, cumulating over time.

Even an annual income of $30,000 today is potentially worth more than $1 million in 20 years time. Imagine no longer having access to that potential income - through injury, illness or death - which is so vital to you and your family.

Who wants to be a millionaire?