In order to ensure that you get a solution that suits you, understanding what is important is key to structuring the policies for you.
If you are just starting out and have a young family, you may need to focus more on being able to pay your immediate bills and expenses. Although insurance may be high on the list of wants and needs, being able to pay your ongoing expenses is always going to be more important.
You have the option here of being able to combine multiple policies into one, and have a policy that provides a benefit in the event of the first insurable event occurring. This is often cheaper than owning a stand-alone policy as there can be less stamp duty payable.
Having the ability to use your superannuation fund to pay your insurance premiums is often a fantastic way of providing the all-important cover your family needs in a way that is affordable.
Consider this; if you are employed, your employer will be putting 9.5% of your salary into superannuation for retirement which could be as far as 45 years away. If an insurable event occurs in your twenties, it has far reaching consequences that put your family at risk financially. For many, using a small portion of these retirement savings to provide an immediate benefit is an attractive option.
Currently, only a policy designed to provide Income Protection benefits is tax-deductible if paid for directly by a person. Often, this is the best option for an individual as generally policies for Income Protection that are held outside of super have extra perks and benefits for the same cost.
Life Cover and Total & Permanent Disability benefits are not generally tax-deductible when paid for directly by a person, but can become tax-effective by holding them within a super fund.
The Right Advice
Getting the right advice from the outset is crucial. Not only could you end up paying thousands of dollars extra over the lifetime of your policies, but you could end up paying tens of thousands if not more in tax costs when a policy is paid out to the beneficiaries. Having a clear picture of exactly what your options are and how they affect you is important.