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Understanding super & money
What is your most financially valuable asset? The answer to this question could be quite different depending on your age. A younger person may say their car or a possession, such as a musical instrument, is their most valuable asset.
As people age their home or super is likely to be what they consider most valuable. However, while these answers seem sensible, the real answer is your capacity to earn an income. This ability likely outweighs the value of any other financial assets you have.
Alex, an engineer, is age 40 and owns a car worth $45,000, a home worth $750,000, and his super accumulation balance is around $250,000. Alex earns an income of $100,000 per year. If Alex plans to retire at age 65, he has 25 years of his working life left.
Based on this, Alex should earn $2.5 million in income between now and the time he retires – not including any salary increases he may receive.
Despite his earning potential being so high, Alex has never considered it an asset. And, while he wouldn’t leave his $45,000 car uninsured and would never let his home insurance for his $750,000 home lapse, he has never considered the impact of losing his future earning capacity.
The sudden loss of your income could occur due to a major illness or injury which could leave you incapacitated for an extended period, or even unable to ever return to work.
The consequences if the unexpected does happen means that everything you’ve worked for, the security of your family, your home, lifestyle and your ability to save for retirement will suddenly be at risk.
Life, total and permanent disability cover and income protection insurance can help you retain financial security and replace your income earning potential by providing a lump sum and/or regular income if adversity strikes.
You may think the unthinkable will never happen to you but did you know:
That’s why it’s important to protect your most important asset, you.
As part of IOOF Employer super, we provide cover to eligible members through a leading Australian insurer called TAL. Interestingly, in 2018, TAL paid approximately $94 million to 998 IOOF super members.
To find out how much insurance cover you have, check your recent super benefit statement or log into your account.
If you don’t have any cover, you may have been affected by the new ‘protecting your super’ legislation designed to protect certain people’s super from being reduced unnecessarily by insurance premiums. You may be able to re-instate your cover or you can apply for cover. Please contact us for assistance or seek advice from your financial adviser.
The amount of insurance cover you need depends on your individual circumstances. Factors that should be considered include:
It will also differ depending on your specific circumstances, such as your health or pastimes.
Find out how much you really need to safeguard you and your family by using our insurance cover calculator. Simply log into your account, go to the insurance page and click on ‘insurance needs calculator’.
If you believe you’re not sufficiently covered, there’s a number of ways you can increase your insurance. However, before making any changes to your cover we recommend you seek advice from a financial adviser. They can take you through the different types of cover and the level you may need depending on your circumstances to give you peace of mind.
If you don’t have an adviser, we can put you in touch with one.
You can customise your insurance to suit your circumstances at any time. Some of the reasons you may want to apply to increase your cover, include:
To apply, complete the Insurance application – life events and salary increase form.
If you have insurance cover with another super fund or insurance policy, you may be able to transfer it to your IOOF super account. You can tailor your insurance by modifying your existing cover or by adding new insurance at any time.
To apply to transfer or tailor your cover and to check the conditions that apply, please refer to the IOOF insurance guide.
Access the IOOF insurance guide, PDS, and insurance forms
Everybody’s circumstances are different. If you’re worried about protecting your family, seek advice from a financial adviser. They can help you navigate the complex world of insurance and help you understand the type and level of cover you need. If you don’t have an adviser, we can put you in touch with one.
1 National stroke foundation website 2 Cancer council – facts and figures 3 Australian Institute of health and welfare – Injury, June 2017 4 Heart foundation website