How would you provide for your family?
Client Name: John
Status: 35, married, 2 children
Accountant John earned $60,000 annually. His wife Joy (34) stayed home to look after their two kids Bruce (4) and Jo (2). John’s debts included $140,000 for his mortgage, $4000 on credit cards and a $6000 car loan.
John had $50,000 life insurance cover. But was concerned about what would happen to his family’s lifestyle if he died or was to suffer an accident or illness that prevented him from working.
With some help, John choose to increase his life cover $1,000,000 and $200,000 Trauma and Total & Permanent Disability Insurance. The combination of superannuation and stand-alone insurance would deal with all of the family debts and provide the family with another $900,000 should John die.
If John was to suffer one of the medical conditions specified in his Trauma Insurance policy, or suffer a total and permanent disability, the lump sum would help him meet the medical costs associated with the treatment of the condition without the need to dip into personal savings or go further into debt.
John also considered his wife Joy need for Life Insurance. They decided to purchase $500,000 worth of Life Insurance to help provide child care if Joy was not around to look after the children. They also included $400,000 Trauma and Total & Permanent Disability cover on her life.
John also chose to protect his income with income protection insurance. His employer provided for sick leave up to three months, but without employment he’d have no other income to rely on. He chose a $3,750 monthly benefit for his income protection cover (being 75% of his income, the maximum level of cover offered) with benefits paid through to age 65.
Now John has protected his family. When we think about providing for our family, we often forget about providing for them if we are no longer around…you maybe thinking that this protection was going to cost John a lot of money..you would be surprised that is wasn’t too exspensive.