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Thread: Advice on Insurnaces being taken out of my Super

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    Member El Skitzo's Avatar
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    Advice on Insurnaces being taken out of my Super

    Hi Guys & Gals

    Got a question for the Financial Planners and clever with money types.

    I'm looking to review my Superannuation at the moment as I feel like I'm falling behind with it and the two things that bother me the most are what coming out of it each year.

    At the moment the financial planning group that is managing my Super takes about $1,450 per year out for "Advisor fees", which basically provides me with a monthly newsletter on sweet FA and access to them if I need to change anything on my account. Sounds like money for nothing.

    I'm also paying around $1,900 per year in insurances for Life Insurance and Total Permanent Disability Insurance, with cover of nearly $1M. Thing is I don't have a mortgage to cover any more, I don't have a dependant partner, and no kids dependant on my income any more.

    So each year these two fees are chewing up around $3,350 out of my Super which is a LOT, and I'm thinking I could be much better off going without either of them? Without the dependants I don't think the insurances are really necessary, and if I moved my super into a big fund like Hostplus Super Fund which performs about as good as most I could drop all the fees from my current advisor.

    What are your thoughts? What the general consensus on the insurances?

    Thanks in advance

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    Member Thomas Peel's Avatar
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    Industry funds are a lot better.
    Tp.
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    Member Crim's Avatar
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    I recently discovered that insurance covering total permanent disablement injury awarded just $35,000, Life insurance award was somewhere around $100k, the most expensive was income protection. In total it would have amounted to about the same as OP.

    I cancelled the lot, it's a fucking rip-off. I'm with an Industry Fund.

    Move to an Industry fund & ditch the Insurance.

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    Member El Skitzo's Avatar
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    Quote Originally Posted by Crim View Post
    I recently discovered that insurance covering total permanent disablement injury awarded just $35,000, Life insurance award was somewhere around $100k, the most expensive was income protection. In total it would have amounted to about the same as OP.
    Yeah I dropped income protection insurance a few years back, as that was coming out of my own pocked and was crazy expensive! I can understand the need for that one if you run your own business or a Tradie or something, but like me being on a Salary with benefits such as sick leave, annual leave etc it just didn't make sense.

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    Member Crobbo's Avatar
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    It takes a few clicks these days to change your investment mix. Certainly not worth that brokerage fee.
    In sterquiliniis invenitur.
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    100% on industry fund...one thing though, they do not take out tax and when you go to access it you get a big chuck going out to the greedy government. You may be able to request it to be taxed.
    Smoke me a kipper...I'll be home in time for breakfast

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    Buy a copy of the Barefoot Investor and read it. The best $20-$30 investment you will make.
    Adventure before Dementia
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    Member El Skitzo's Avatar
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    Quote Originally Posted by Morgs View Post
    Buy a copy of the Barefoot Investor and read it. The best $20-$30 investment you will make.
    Currently working my way through it, so I might have to power read it over the weekend. My super is currently with AMP so I'm definitely looking to move it to Hostplus, just after opinions if all these insurances seem necessary as they seem waaay over the top to me.

    Definitely appreciate the advice coming in so far!
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    I have about $1.9M death benefit and it costs me $54 dollars per month.

    Admin fee appears to be $8 per month.

    So I pay about 1/5th of what you pay so you need to get on that and change to a government/industry fund.

    What I will say is that one way they do death benefit, you buy 'credits' (or whatever) and those credits are worth a certain amount, and that amount decreases as you age.

    So my credits are currently worth $1.9M but when I'm 65 they're probably only worth $500,000 - but I would still be paying $54

    The other option is to pay for a set death benefit where the costs increase as I age, so while I pay $54 now, when I'm 65 I might be paying $400 just to keep that death benefit up at $1.9M

    Just fudging the numbers in those examples for artistic purpose.
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    Oh my god.

    Ex Financial Planner and personal insurance Business Development Manager here. Please. Just pick up the phone to your existing financial planner and ask to come in for a review. THAT is why you pay them the fee.

    Paid off your mortgage? Sweet. Decrease the sums insured for Life and TPD. lol at the people telling you to cancel them because they're a rip off - you guys realise that the older you get the closer you are to dying and so the more your premiums are going to cost, right? And if you fly on a helicopter to a rig floating in the ocean don't expect that your rates are the same as an office worker.

    Industry funds being "better"? Pfft. Massively debatable depending upon a whole bunch of things. For some, sure. But without knowing a whole bunch about you then it's not for anyone to guess and say.

    I'm currently on claim. I had reviewed my insurances not long before I became too sick to work. Now I'm getting Income Protection (tax deductible if you're paying outside of super) and hope to have a Lotto win "Own" occupation TPD payout in the next few months. Still got the Trauma insurance for when I inevitably get cancer or have a nasty accident. All going well I'll be using the money to start a business of my dreams.

    Please go see your Financial Planner. Or, if you don't like them, I'll recommend you an amazing one. Same for anyone else on here looking for insurance advice - I worked with a LOT as a BDM and can steer you to the one largely regarded as the best independent (non-product aligned) around.
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    Member El Skitzo's Avatar
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    Thanks Loud, I have a meeting with my current Financial Adviser this Wednesday. I just wanted to arm myself with a little more information and opinions before I go in.

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    If you're worried about your super balance then ask them for tax effective ways of contributing to top it up. Insurance inside of super has some pros and cons but adding your own money to offset their expense can be worthwhile for some people.
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    So if you don't have a financial planner to lean on..and play your investments by ear.. what would you suggest..?
    " Imagination is the seed of life..."

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    Depends. Seeing a Financial Planner would be a good start. They'll ask you questions about your current situation, goals, etc and then devise a plan to get you there. Maybe they'll rope in Lawyers and Accountants to help set up other entities like Trusts and Funds. Maybe they'll just work through a budget and tell you which debts to pay off first. Maybe they'll suggest investing your money in some long term stuff and set up a "play" fund so you can mess around on the share market. Perhaps they know of tax advantages you're not taking advantage of or know an accountant who does. I've worked in businesses where I've posted investment cheques for tens of millions of dollars and then turned around to speak to Centrelink to discuss pensions. Unless you've kept on top of your finance and setup then there's always something to be done that can be of benefit. They'll also tell you to get a Will - Post Office or lawyer depending upon your family complexity.
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    How do I find a financial advisor who is remotely interested in ME.. not just their reflection and cash account.....?

    take a punt is it.?.since Gov. controls don't stop the bleed of self interest in the industry.
    " Imagination is the seed of life..."

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    Member Loud's Avatar
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    Quote Originally Posted by GsxInShed View Post
    How do I find a financial advisor who is remotely interested in ME.. not just their reflection and cash account.....?

    take a punt is it.?.since Gov. controls don't stop the bleed of self interest in the industry.
    There was a lot about the industry that I didn't like. But there was a lot about it that I believe/d in. So your jaded comments aren't inaccurate however it's not as widespread as some would have you believe.

    I can't help you sorry. Not even with a referral. My interest was in strategies and insurance, not dynamic/speculative investment. Frankly if you find an adviser who is looking to help you with only your ME then that's one I'd walk away from anyway. You're probably more after a stock broker.

    A planner would look at how many years you have until retirement, your attitude towards risk, etc etc. They'd then point you to a chart showing the movement of the ASX100 for the last 100 years and show the long-term returns on investment and recommend an investment portfolio with an asset allocation to match your level of risk. Planners are all about minimising the risk while maximising returns. That's why they recommend insurance. That's why they work with Accountants, lawyers. Sure, they recommend stocks as well but they'll be ones that are allowed by their Licensee's Investment Committee and will form part of the percentage of your Australian/International Share asset allocation.

    Well, the good ones do...
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    so on my own I have fixed term/shares and cash.. a slush fund with bitcoin-where I take regular profits ..

    all that is needed is some real estate, positively geared in another state or 2 and I think I'll be fine.

    oh and some tax offsets to balance the income...;-] amidoinitrite?
    " Imagination is the seed of life..."

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    You're doing great. Now if you sell me your share portfolio for $5 I'll help you with your tax offset issue, then I'll be laughing! ...I mean you. You'll be laughing... *ahem*
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    Did you say sell you 5 RGP shares for $5 ..done

    I'll be offshore for a week or two.

    Can you do Western Union...???? ..sound financial advice... right there.

    No changing leopard spots eh?
    " Imagination is the seed of life..."
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