A health crisis can occur at any time of life, but the risks obviously increase as we age. Unfortunately, due to this increased risk of illness or injury the cost of insurance for those over 50 can be high. As a result, people in this age group are tempted to drop their insurance cover altogether just when the need is at its greatest.
If age 50 is looming, or recently passed by, it’s even more important to continue to protect both your income-earning ability and the financial security of any dependants. Here are some solutions to consider:
- Review your level of insurance. As your investments and superannuation increase, you may be able to reduce your cover and still provide for your beneficiaries.
- Life and disability insurance can be arranged through most superannuation funds. Premiums can be lower and are paid from the superannuation balance thereby reducing strain on the household budget.
- For income protection insurance, if you have accrued adequate annual or sick leave, you might want to increase the waiting period which may reduce your premiums. Depending on circumstances, this may allow you to retain an important benefit at a more affordable price.
- Pay in advance. Prepaying 12 months’ worth of income protection policy premiums before 30 June may allow you to bring forward a tax deduction for next year into the current year. This can potentially reduce your taxable income and the tax you pay this financial year.
Everyone is different so there might be other solutions not mentioned here. If you’re not sure what to do, always talk to a licensed financial adviser before you make any adjustments to your insurance cover. We can help you achieve the right balance for your needs.
For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.
Past performance is not a reliable indicator of future performance. The information and any advice in this publication 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. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.