Protecting yourself and your loved one

YOUR ability to earn an income is your greatest asset, which is why it makes sense to protect it, says Ian Ritchie, financial adviser for Ritchie Advice.

Most people are very diligent about insuring their house as they consider it a large asset that would cost them too much to replace if something unexpected were to occur.

“Being financially healthy means more than being able to afford the mortgage repayments but, on top of that, the other expenses involved in owning a property,” Mr Ritchie said.

“But what then happens if disaster strikes and you are unable to work for one or two years – or indefinitely?

“Many of us don’t plan for this but it can – and does – happen.”

Having an income that allows you to maintain your lifestyle and, most importantly, insuring it, helps preserve your freedom to enjoy the life you want for you and your family.

Mr Ritchie said people could be surprised by just how much they could earn over their lifetime.

“If you consider the value of your annual income, you would find that an average full-time income of up to five to 10-years would cover your home’s value, but most of us will be working 40-plus years,” he said.

Mr Ritchie said there could be drawbacks to relying on potential Centrelink benefits or the belief that an employer would “look after us” in an emergency.

“It is likely that you will need to replace the income you are accustomed to,” he said.

“A large mortgage cannot be paid on a disability pension and workers’ compensation is very tightly defined – this is why you want to be insured.

“While it is a good back stop, living on a disability pension of $860 per family (for a single person) is very hard and will have a major impact on your lifestyle and family.”

Many Australians have access to basic income protection cover through their superannuation and should look into this further.

There are also many different options available to make this cover achievable.

If you have any questions or wish to look at your insurance needs contact Ritchie Advice today for an obligation-free first interview by phoning 6234 1488.

This advice may not be suitable to you because it contains general advice which does not take into consideration any of your personal circumstance. All strategies and information provided in this article is general advice only.

Ritchie Advice Pty Ltd ABN 12 150 128 448, is a Corporate Authorised Representative 408050 of Dover Financial Advisers Pty Ltd, Australian Financial Services Licensee No. 307248.

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About the Author: Hobart Observer

The Hobart Observer is your monthly community newspaper, reaching over 24,000 homes and businesses in and around the City of Hobart. It is the product of Nicolas Turner, Justine Brazil, Ben Hope, Simon Andrews, Tobias Hinds and guest contributors, with support from advertisers.

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