Insurance Advice

Insurance isn’t just a cost, though it often feels like it. You buy peace-of-mind that should a serious issue effect you then the consequences won’t unduly affect your family. Insurance provides you with the ability to manage the financial and emotional impact of some of the more drastic surprises, whether personally or in your small business.

Insurance can’t replace a loved one but it can help reduce the financial burden by providing the capital to ensure your family has choices.

A yes to any of the following questions means you have a need for insurance coverage. However, many Australians are underinsured and the consequences can be very serious for families should there be a death or serious injury.

1. Do you have a mortgage?
2. Do you have school fees?
3. Do you have any personal loans?
4. Do you have any credit card debt?
5. Do you have dependents?
6. Would your financial position be affected if you were to suffer from an illness or injury?
7. Do you want to have enough capital to look after your dependents if you were unable to care for them for an extended period of time or perhaps indefinitely?

Succession Planning

One day you will leave the business you started or owned and operated for many years. Your heart and soul is in the business but what is the best way forward after you decide to sell, retire or leave due to health reasons. To make sure your business remains on the path your set for it a succession (or exit) plan is needed for when you leave.

To help ensure your business transitions smoothly to the new owner you need a properly drafted succession plan. Also, by starting this planning process early, you can also help maximise the value of your business.

OYT Wealth succession planning process includes:

• Assistance, advise and expertise to ensure your business transition to the next generation or owners is as smooth and trouble free as possible.
• We encourage an early start to this planning as it can help maximise the value of your business and help it to meet your future needs.
• The drafting of a plan to ensure it complies with regulatory requirements.
• Making sure your succession plan is achievable and will set a realistic timetable for you to achieve your plan.

Wealth Creation

Investing your hard-earned savings can be complex to manage and benefit from. Of course, there are the lucky ones who just seem to become wealthy. However, for the rest of us it requires planning, dedication, and time – the more time the better.

There are many issues to manage such as levels of risk, market timing, asset classes, and your own goals, objectives and preferences. Even getting started is difficult but this is where we have the time and expertise to help you.

Even after initial investments are made there are important issues to address such as monitoring, buy/sell decisions, tax considerations, and when to take a loss or profit. In addition, there is a huge amount of investment information and spruiking that can easily lead you in the wrong direction with unwanted consequences.

Having a proper investment plan is very important and the sooner you implement it the sooner you can grow your wealth. We can help you develop a financial plan and provide advice that will help overcome the issues raised above.

Estate Planning

Your estate is made up of everything you own. This includes your home, property, furniture, car, personal possessions, business, investments, superannuation and bank accounts. Firstly, having a legally valid will is extremely important. Not having a will is to 'die intestate' which can be costly and create added stress for loved ones at an already difficult time. We can help ensure you have an up-to-date will. You may think that having a current will outlines what will happen to your estate should you die or become unable to manage your affairs.

Unfortunately, for those with more complex financial structures this may not be the case at all.

To make sure your affairs are in order an Estate Plan will:

• provide for and protect loved ones with specific needs, including children
• ensure your children’s inheritance receives increased protection if a relationship breaks down
• ensure you receive professional advice on how to structure your assets to gain available tax advantages
• ensure your wishes are recorded in legally binding documents including your will, free from ambiguity provide you with peace of mind knowing, should you die or be unable to legally manage your affairs, that they will be managed by someone you trust
• ensure non-estate assets such as jointly held assets, family trusts, super funds and private companies are also documented as it may not be possible to deal with them in your will.

Retirement Planning

Retiring on your own terms is not always easy to achieve, however it is evident that those who plan for retirement are more likely to do so. However, there are still many Australian who retire with less than they hoped for and, for many, even after paying into Super funds for many years.

Also, Baby Boomers can find they have a good level of assets but little real income and then, when they retire, that the assets limit their ability to properly access the Age Pension. There are many savings, insurance and taxation strategies that can help you attain better outcomes but managing it all is complex.

Trying to do it all on your own can lead to lesser results than hoped for or needed. Even if current savings are quite small it is beneficial to seek professional help. Our overall aim is to maximise your retirement income and reduce your taxation to help ensure you can afford what you want to do in retirement.

Centrelink Advice

Social Security assistance is provided by various Australian Government Departments including Centrelink and the Department of Veteran Affairs. We understand that Centrelink plays an important role for individuals and families when it comes to planning. Payments such as the Age Pension and Disability Support Pension provide long-term financial support whilst Newstart Allowance and Sickness Allowance provide assistance for a shorter period of time. Other payments such as Family Tax Benefit, Parts A & B assist with the cost of raising children.

As well as the payment of benefits you may be entitled to access certain fringe benefits. For example, if you are of Age Pension age and/or are receiving the Age Pension you may be entitled to concession cards such as Pensioner Concession Card, Commonwealth Seniors Health Card or the State Seniors Card which offer concessions, benefits and discounts. The Department of Veteran’s Affairs also provides similar benefits.

Our Centrelink advisory services provide you with strategies and advice to ensure you:

• Maximise Centrelink benefits, such as the Aged Pension
• Gain entitlement for the Commonwealth Seniors Health Card
• Gain entitlement for the Low Income Health Care Card
• Family entitlement planning, incorporating Family Tax Benefits, Paid Parental Leave, and/or the Baby Bonus

Life Insurance

We provide advice on how to insure against the uncontrollable in life. Specialising in the following services of Life Insurance - Insurance there to protect your family's future and those assets you have worked to create.

Life insurance is paid as a lump sum to either a nominated beneficiary or your estate. The policy is paid out on either death or diagnosis of a terminal illness that will end in death within 12 months.

Policy is generally taken out to eliminate financial hardship after death of a spouse, especially if there is one or a main breadwinner. Proceeds can be used to pay out debts such as mortgage, pay for children's education or invested for the family's future needs. Cover can also be paid out to the new guardians of children in order to facilitate home extensions, education and ongoing costs of raising children.

'In Australia there is a death every 3 minutes and 56 seconds'
(Source: Australian Bureau of Statistics 2006)

Trauma Insurance, To pay you a lump sum if you have a trauma or serious illness.

Trauma Insurance is paid out as a lump sum to assist you if you are diagnosed with a defined event. Events that are covered are defined in the policy and generally cover such diagnosis as cancer, heart attack and stroke. Should you be diagnosed with a condition, chances are you will be out of the workforce for at least some time. Trauma cover eliminates financial hardship so that your focus can be on recuperating and adjusting to lifestyle changes. Cover can be used to pay debts, medical costs or necessary alterations to your home such as handrails etc.

'On average 1 in 3 men and 1 in 4 women are likely to suffer some form of cancer during their lifetime'

(Source Australian Institute of Health and Welfare 2004)

Loss of Income Insurance

Provides a regular payment, generally each month. It will replace 75% plus your SGC can continue to be paid - so up to 85% of your usual monthly income when you are unable to work due to an accident or illness. Premiums are generally tax deductible, whilst any claim received forms part of your assessable income. Cover is generally to provide for family's lifestyle and meet financial obligations whilst you are unable to work.'Every working Australian has a 1 in 3 chance of becoming disabled for more than 3 months before turning 65 years old'

(Source Institute of Actuaries of Australia 2006)

Business Expenses Insurance

Business expenses insurance, covers up to 100% of your fixed recurring business expenses like rent, utilities and non-income producing staff wages, if the insured cannot work because of sickness or injury. Payments are made monthly as a re-imbursement of costs incurred and will pay for a maximum of 12 months. Premiums are usually tax deductible.

Key Person

An important area of planning within your business should be risk management of key personnel within the business.

An owner or employee is a "key person" within your business if they are responsible for generating most of the business income. The key person will vary depending on the industry and the business. Most employees are non income producing - that is they may have an important role in the business, but if they weren't there tomorrow, they could be easily replaced or would have little impact on the bottom line.

However some employees are key in that a majority of the business income would stop if they could no longer work.

Think about the key people in your business and start your risk management planning by asking if your business could:

• Survive if a key person was suddenly unable to work due to illness or injury?
• Cover the loan payments to the Bank (and would the Bank call the debts in)?
• Maintain cash flow to meet ongoing commitments?
• Continue to provide an income to the incapacitated person?
• Fund a succession planning strategy?

Key person insurance may take the form of Income Protection, Business Expenses, Life, Term & Total Disability or Trauma - it is the way it is used within your business that makes the difference.

Are you already thinking "but it won't happen to my business?"

1 in 6 men and 1 in 4 women aged between 35 and 65 will suffer a disability that results in them being unable to work for 6 months or more. For people over age 40, the risk of developing heart disease is 1 in 2 for men and 1 in 3 for women. (CommInsure 2010 claim statistics)

Yet three quarters of business owners don't have income protection (or business expenses cover), even through the premiums are tax deductible for both. Only a quarter of business owners could maintain their current lifestyle for more than 6 months if they suffered a serious illness or injury.

Total Permanent Disablement (TPD) Insurance

Total Permanent Disablement (TPD) Insurance provides a lump sum to assist you if an accident or illness leaves you unable to work in either your own or any occupation again. It is important to discuss 'own' or 'any' cover with an advisor to adequately understand any cover and ensure that you have the right policy for your occupation. Purpose of insurance is to provide finances in the wake of you being unable to work again. Money can be used to pay debts and leave a lump sum to replace income as well as meet medical expenses.

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