Protecting your loved ones: Child trauma benefit

When considering personal insurances, often you may first think about protecting your household financially from unexpected events (e.g. a passing, sickness or injury) that may occur to yourself; however, unfortunately unexpected events can also happen to your loved ones, which can have a similar result in terms of the financial impact on your household.

Due to this, in our animation, “Personal insurance for families”, we touch on the concept of cross insurance, namely, insuring both heads of the household whether they be dual income earners or a sole income earner and a non-working spouse.

 

Similarly, it’s also important to consider the financial impact on your household if your child was to unexpectedly pass away or suffer a sickness or injury. Common questions worth considering, especially regarding a sickness or injury, are:

  • Do you have the adequate resources available to pay for any immediate and ongoing medical treatment, or home and/or care modifications that your child may require?
  • How would you cope financially if you or your spouse needed to stop work to care for your child either on a temporary or long-term basis?

 

Child trauma benefit
Some insurers offer a unique type of personal insurance that is specifically tailored to cover your child. This type of personal insurance is called the Child Trauma Benefit and can come as either an in-built inclusion or an optional extra (with its own insurance premium payable) to your Trauma insurance policy.

The Child Trauma Benefit provides a lump sum payment to you if your child was to pass away or suffer a specified medical event. Depending on the insurer, and whether the Child Trauma Benefit is an in-built inclusion or optional extra, the lump sum payment amount can be either fixed (e.g. $10,000) or an amount specified by you upon application (e.g. up to a maximum sum insured, such as $200,000). Furthermore, in the event that the Child Trauma Benefit is an optional extra, and the amount specified as the sum insured reaches a certain threshold, you may find that underwriting is required.

 

Medical events covered
The medical events covered under a Child Trauma Benefit can range between insurers. In addition, the medical events covered usually are not as extensive as those under an ordinary Trauma insurance policy. As such, below is a list of some of the medical events that you may find covered under a Child Trauma Benefit:

 

Child Trauma Benefit

Medical Events
Cancer events
Benign brain and/or spinal tumour Invasive cancer
Leukaemia Hodgkin’s disease
Malignant bone marrow disorder Skin cancer
Coronary events
Cardiomyopathy Heart attack
Stroke
Other serious events
Accidental HIV infection Aplastic anaemia
Bacterial meningitis Blindness
Brain damage Chronic kidney failure
Chronic liver or lung disease Coma
Intensive care Loss of hearing
Loss of use of limbs and/or sight Loss of speech
Major head trauma Major organ transplant
Multiple sclerosis Muscular dystrophy
Paralysis (e.g. diplegia, hemiplegia, paraplegia, or quadriplegia) Severe burns
Viral encephalitis
Terminal illness

 

Things to consider
When it comes to the Child Trauma Benefit, there are several important considerations. Although these may vary between insurers, listed below are few (although not a comprehensive list).

Policy eligibility, cessation and conversion
You may find that the Child Trauma Benefit:

  • Is only available to your child if they are within a specified eligibility age bracket. For example, between 2 and 15 years.
  • Has a cease date that often refers to a period just after the upper limit of the specified eligibility age bracket has been reached. In addition, this can also occur if the relevant Trauma insurance policy that holds the Child Trauma Benefit ceases.
  • Has the capacity to be converted to an ordinary Trauma insurance policy for the child just prior to them reaching the policy cease date related to the upper limit of the specified eligibility age bracket. In this circumstance, the policy becomes their own; however, depending on the sum insured, underwriting may apply.

Guaranteed future insurability
You may find that you are able to increase the sum insured by a predefined amount (up to a maximum limit) upon certain milestones being reached, such as the child’s 6th, 10th and 14th birthday, without an assessment of your child’s health.

Exclusions and qualifying period
You may find that the Child Trauma Benefit will not be paid in the event of one of the following:

  • The medical event is caused by a congenital or pre-existing condition, an intentional self-inflicted injury, or attempted suicide.
  • The medical event arises within three months of the commencement of the insurance policy.

Partial or full payment
Depending on the medical event that arises (e.g. type and severity), you may find that a partial or full payment is made under the Child Trauma Benefit.

 

Moving forward
We may not like to consider the thought of our child unexpectedly passing away, or suffering a serious sickness or injury; however, unfortunately it can happen. As such, in the event of an unexpected event, the Child Trauma Benefit aims to help ease the financial stress that may occur to you and your household during this distressing time.

Although in this article we have provided a general overview, the Child Trauma Benefit can vary considerably among insurers. Consequently, it’s important to seek professional advice and read the relevant Product Disclosure Statement.

If you would like to know more about the Child Trauma Benefit, please do not hesitate to book a time to have a chat with us.

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Financial attitudes and behaviours: The power of perspective

In our article, ‘Financial mindsets of the super wealthy’, we discuss that whilst on the path to financial freedom, occasionally it can be helpful to gain perspective along the way, by considering and then reflecting on the financial attitudes and behaviours of others.

It’s this gained perspective that can sometimes allow us to look inwards and evaluate our own financial attitudes and behaviours, and where applicable, make adjustments.

In this article, instead of focusing on the super wealthy, we look at the financial attitudes and behaviours of everyday Australians as reported in the Australian Securities and Investments Commission’s (ASIC’s) latest Australian Financial Attitudes and Behaviour Tracker (Wave 5).

 

Australian Financial Attitudes and Behaviour Tracker
The Australian Financial Attitudes and Behaviour Tracker was launched by ASIC in 2014 to track a number of financial attitudes and behaviours among adult Australians. Below are several of the findings from the five main areas focused on.

Financial attitudes – the attitudes towards managing money
Around 6 in 10 Australians feel confident about managing their money, but more Australians find managing their money stressful. Within these overall findings, younger people, including those with children, expressed higher levels of financial stress when compared to other groups that responded to the survey.

In our article, ‘Recognising and dealing with financial stress’, we discuss the fact financial stress can arise at any point in your life. In these situations, it’s important to recognise and deal with financial stress when it does present itself. Furthermore, you may find that financial stress can occur when confidence around managing your money is a little low. As such, getting your personal finances in order can often be a great first step in the right direction to gaining confidence in the management of your money and alleviating financial stress.

Keeping track of finances – approaches to managing everyday expenses
Around 8 in 10 Australians have a budget and 9 in 10 are keeping track of their finances in some way; however, despite these overall findings, checking for unusual or suspicious transactions on either bank or credit card statements was a noticeable exemption for some.

In our animation, ‘Tracking your spending’, we discuss the importance of keeping track of your day-to-day spending habits. Tracking your spending is a great way to make sure your spending is aligned with the budget you have set for yourself, so that you can continue to work towards achieving your financial goals and objectives. It’s also an important means of assessing whether unusual or suspicious transactions have occurred, and where applicable, bringing these to the attention of your relevant financial institution so that they can be appropriately addressed.

Planning ahead – planning for the short, medium and long-term, including retirement and beyond
Around 1 in 2 Australians have a short to medium term financial plan (3-5 years), whilst around 1 in 4 have a long-term financial plan (15-20 years). Furthermore, roughly 2 in 3 Australians reported monitoring their progress in the last six months.

In our article, ‘Running the retirement plan race’, we discuss that financial plans are important individualised road maps devised to help you reach your financial goals and objectives. Along the way, it’s important to assess your progress, and where applicable, make adjustments so that you continue to move in the right direction.

Think about one overall long-term financial plan (where you want to be) that has multiple short to medium-term financial plans (how you are going to get there) within it – and, the markers of progress towards realising your overall long-term financial plan can be measured by reviewing your achievement of these short to medium-term plans over time.

Staying informed – use of information, tools and guidance when needed
Financial institution websites, followed by talking to family and/or friends, continue to be some of the most common sources of information Australians consulted in the last six months when considering bank accounts, credit cards, home loans and personal loans. However, in terms of investments, seeking professional advice was the most common source of information Australians consulted.

When it comes to your personal finances, an important consideration is the power of leverage gained when a team of professionals (such as a financial adviser, accountant, solicitor and mortgage broker) are built around you and appropriately utilised. In our video, ‘Teamwork, leverage and achieving a common goal’, we discuss the importance of recognising where your limitations lie (in terms of knowledge and skillset) and the subsequent circumstances where the benefits of teamwork may be appropriate in achieving your financial goals and objectives.

Ultimately, seeking professional advice in areas of your personal finances (cashflow, debt management, insurance planning, investments, and superannuation) will enable you to receive appropriate guidance that is tailored to your financial situation, goals and objectives.

Financial control – savings behaviour and managing debt
Around 1 in 5 Australians reported that they did not save any money over the last six months. In addition, a small percentage reported that they would not be able to cover three months’ living expenses if faced with a sudden loss of income.

Given the rising cost of living (such as electricity and grocery bills), and a relatively sluggish wage growth environment, at present you may have started to feel a slight pinch in the hip pocket when it comes to the availability of surplus income to put towards a savings plan or the repayment of debt. In our article, ‘Household expenditure: Finding surplus income’, we discuss that by completing or reviewing an existing budget, you can gain a better understanding of the movement of your money (inflows and outflows) and areas where surplus income may lie. By itemising your household expenditure and then taking the time to do an assessment of your spending habits, you can see whether adjustments can be made here or there to find surplus income.

In addition, in terms of managing living expenses with a sudden loss of income, it’s important to consider the establishment of an emergency buffer and appropriate personal insurances, so that if such a situation does arise you do not need to rely on other sources, such as credit cards and borrowing.

Financial literacy – level of understanding of several key investing concepts
Less than 1 in 3 Australians report understanding the risk/return trade-off concept and only 4 in 10 understand the investing principle of diversification.

In our article, ‘Diversification fundamentals in portfolio construction’, we discuss the importance of ‘not putting all your eggs in one basket’ and how diversification can be achieved through spreading your funds across different asset classes and markets and regions. Furthermore, we also discuss how your risk tolerance, financial situation and financial goals affect how diversification is applied when it comes to devising an appropriate investment mix to meet your needs within a specified time horizon.

Ultimately, words and our understanding of them can help us to comprehend in a meaningful way the information that we receive and make informed decisions in relation to our own personal circumstances. Although, jargon is prevalent in many industries, in terms of investments, the risk/return trade-off concept and diversification principle are two important things to understand.

 

Moving forward
Our ideas, thoughts and opinions can invariably influence our financial attitudes and behaviours, which can in turn influence how we manage our personal finances. Sometimes comparing similarities and differences to our own personal circumstances, via gained perspective from others, can allow us to look inwards and see whether there are things that we need to take the time to consider, improve upon or give ourselves a pat on the back for.

Please remember that we are here to help and support you on your journey towards financial freedom. As such, if there is an area of your personal finances (cashflow, debt management, insurance planning, investments, or superannuation) that you would like to discuss then book a time to have a chat with us.

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New year, new career, new you. Employment hotspots for 2018.

Many employees returning from summer holidays may be pondering a career change in the face of sluggish average wage growth.

So what industries are predicted to be most in demand?

National recruitment company Hays predicts data security and technology, human resources, social assistance, aged care and construction will be among the job hot spots in 2018.

Tim James, Hays managing director for Victoria, Tasmania and ACT, says data security and IT jobs will boom as technology continues its rapid growth.

“Numerous industries are spending a significant amount of money and investing in improving their products and their services and efficiency,” he said.

Sectors such as finance and banking, mining and professional services are investing in new technologies, with expertise required in cyber security and innovation.

“That is definitely a big area that we are seeing skill shortages in,” Mr James said.

As companies introduce new innovations in technology, jobs for human resources professionals will increase to ensure the changes are properly integrated into organisations.

“With all change … it’s really important that it gets embedded into the organisation, so there definitely is a big emphasis on HR professionals being able to support any change,” Mr James said.

As the National Disability Insurance Scheme continues to be rolled out across Australia, jobs in the sector will grow to provide support to an estimated 475,000 people with a disability.

There is also growing demand for aged care employees as baby boomers age, including clerical jobs, personal care attendants, registered nurses and facility managers.

Psychology is another area tipped for healthy jobs growth as people become more attuned to looking after their mental health.

Mr James said large public infrastructure projects such as multi-billion dollar metro rail tunnel projects in Melbourne and Sydney will boost the construction sector over the next eight to ten years.

The most recent federal Department of Employment industry projections pinpoint health and social assistance as being the main area of job creation in the labour market since the 1990s, and that trend is expected to continue.

Health and social assistance, professional scientific and technical services, construction and education and training are forecast to provide more than 60 per cent of total jobs growth between 2017 and 2022.

Employment in health and social assistance is forecast to rise by more than 250,500 jobs, or 16.1 per cent, while jobs in professional, scientific and technical services are tipped to increase by 126,400, or 12.5 per cent.

The computer system design and related services sector is projected to swell by 54,200, or by almost one quarter, after having grown by nearly 84 per cent over the past decade.

Construction industry jobs are predicted to grow by 120,700, or 10.9 per cent, while employment in education and training is expected to increase by 116,200, or 12 per cent.

There are expected to be fewer jobs in manufacturing; electricity, gas water and waste services; and agriculture, forestry and fishing.

 

 

Article source here.

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