Protecting your Asset & Family

[Katrina]

Worthwhile advice to consider on how to protect your mortgage should cir***stances change discussed below by qualified and experienced Financial Planner, Terry Simmonds (terry.simmonds@ampfp.com.au) ....

“It is a requirement that you adequately insure your home when you have borrowed money to buy it. Shop around for the best quotes, but make sure what cover you are getting for your premium. Insurance Brokers can source out the best deal for you, or you may get discounts with other companies with whom you have dealt with for a long time.
Having insured your home and contents, it is also equally important that you insure yourself. In the event of the decease of the main breadwinner, inability to work or losing employment, then retention of the home for the family must be a priority. Who will be able to repay the mortgage?
Seek financial advice with regard to your own personal insurance protection. You need to consider Death Benefits, Total and Permanent Disablement, Trauma Cover and Income Protection. Don’t get daunted by these as personal insurance protection is just as important as property insurance.
See your Financial Planner, if you have one, or have a look at what risk protection cover your current superannuation provider offers. Be aware of “accidental death” policies, as these mean what they say... accidental.”

[gabrielle2106]

Definetly shop around, I just changed our house and contents insurance, I got a better policy (covers more) and is $480 a year cheaper..

[Julie-Ann]

What a great saving Gabrielle:)

[Lanne]

I shop around a lot. I am an insurance freak.... but when something goes wrong there is always someone to call.

Make sure you are properly insured. I see a lot of people tally up furniture and computers etc.. but what about clothing. Think about the cost of socks x how many you have.. Ts? PJs... let alone good clothing and suits and expensive jeans and accessories.

Bathroom items are often forgotten and REALLY add up. Open the drawers and do some quick math. Cutlerly and kitchen items .. like glasses..are they in the total amount? Hit the laundry and garage and do some math in there..If you have more than 30CDs/DVDs total - you need to list them on most policies. It is also worth asking about your car keys. House keys cost a small fortune to replace, as can the remotes for the garage, and especially keys to newer cars (mine is $800).. so you want to cover them). It is so easy to be underinsured.

I also have had a LOT of trouble getting business insurance.. because i work from home. The reality is that the business insurance would argue with the home insurers and vice versa if there was a fire. Who started it? whose room did it come from etc. nightmare. I also found it very very expensive.

A couple of months ago I found that AAMI have a business @ home team and the savings are significant. I was paying about $2000 a year more than I am now. BARGAIN. If you run a home office... i would call and get a quote...

We have ING life/trauma/PTD/Death and IP insurance.. it is such a great deal i am skeptical. Yes we do pay quite a bit for it but the coverage is outstanding. If they actually paid out what they say they do... (and i have no reason to believe they wouldnt).. then it is awesome coverage.

The one that makes me cranky is workers comp. My staff have it.. but i dont. As the business owner it would be $2000 a year for me alone. ...vs $under $200 for all my staff. Grrrr

[Julie-Ann]

Brilliant advice Lanne:) When you mentioned bathroom products my heart skipped a beat. Have I ever mentioned that I am a regular customer in Mecca Cosmetics- wonderful products but expensive:( Goodness knows the cost of all those products in my bathroom:eek:
Thanks for the name of the insurance companies- I would imagine they will be getting a few extra calls today.

[tryingtodecorate]

Good thread. Make sure you have a Will too. We don't and my hubby came pretty close to leaving this earth a month ago. While he has adequate life insurance for me and the kids to continue on we could have had trouble accessing that money. As soon as he's better we'll be off to make a Will.

[Julie-Ann]

Excellent point Tryingtodecorate. So many people don't have wills. My FIL refused to write one because he thought it would jinx him. I don't know if this is still the case but it used to be if you didn't make a will the government took 10% of your assets when you died. That was enough for me to write a will at 21. I would also suggest you be as specific as you can in a will. We have specified who gets certain valuable items so there is no misunderstanding. I don't know if this one would stand up in court but we have also specified that Mr17 isn't allowed to sell our antiques until he is 25 years old- hopefully by then he will appreciate them & stop considering them old junk:D
And a tip have them witnessed by people you think will be around in 20 years and make sure you all use the same pen. My window cleaner has to go to court about his wife's will because a different pen was used by the witness:(

[Katrina]

Great ideas.

[rachel]

I agree. Proper insurance (and a proper will) is so important.

With the wills, don't forget that certain life changes will invalidate your will (marriage does, interestingly divorce doesn't!)

If a loved one dies intestate (this means without a will) someone will need to apply for Letters of Administration. This can take quite a while and sometimes you'll need a lawyer to help you. Then the property is apportioned according to the law (which may not be what you want!)

BTW: this is not legal advice ;)

[Julie-Ann]

Rachel do you know if it is true that the government takes a percentage of your assets if you don't leave a will?

[rachel]

Yes there will be fees, for applying for the letters of administration and (depending on who is the executor of the estate) fees for that too.

If someone dies with only a small amount of assets you may not need to apply for letters of administration (a house held as joint tenants doesn't count for this, this will transfer automatically to the surviving partner, but a house held as tenants in common will need to be included in distributing the estate). In this case there won't be any fees.

It is REALLY complicated. It is hard enough for families when someone passes away I think it is better to do what we can to make things a little easier.

[Julie-Ann]

So if you don't write out a will and protect your family the government will still be taking money from you when you are dead & buried:eek:
I think you can buy a will kit at your local newsagency.

[gabrielle2106]

On keeping track of what you have, i found a free downloadable program called 'my stuff'...you keep track of everything, with room for reciepts, pictures etc...i was shocked when i put my stuff down, how much we had. Now, i add in whatever we purchase and remove what goes...it takes a bit of effort to start with, but it is worth it...

[rachel]

Unfortunately there can be problems with those will kits Julie-Ann. It is best to get a lawyer experienced in wills and trusts to do one for you. Most lawyers write wills inexpensively because they make their money from executor fees!

We will be doing ours again shortly and although we can write our own we always get someone else to do it for us.

[Julie-Ann]

Good advice Rachel, no one wants problems for their families after they have gone.
Gabrielle do you have a link to that website? It sounds like a very smart thing to do.