Insurance policies and Estate Planning
What does insurance have to do with your Wills? Potentially it is incredibly important.
First of all, when you come to Novus we don’t just do Wills we do an entire Estate Plan, including assisting you with the preparation and advice around the documents that you need if you are alive but need help making decisions. If you were in a car accident this week and you were stuck in a hospital bed then there are at least two insurance policies that suddenly become important, your motor vehicle insurance and your private health insurance. Do you know where those documents are? If you had to direct someone else to go to your house and find those documents, or go to your computer and locate those documents, would you know where to send them?
Secondly for most Australians who die prior to retirement age their life insurance is one of their most significant assets, if not their biggest asset. Do you know how much your life insurance is? Do you know how much it would cost to increase it? Do you know if it would be enough for your family if you died?
What insurance?
Do you know which insurance policies you have? The insurances that you might have, or that might protect you, include:
Life insurance - attached to your superannuation
Income protection insurance - attached to your superannuation
Worker’s compensation insurance (or business insurance)
Green slip
Car insurance such as third party or comprehensive
Home and/or contents insurance
Private health insurance
Professional indemnity insurance (attached to whatever you do at work)
Public indemnity insurance (often attached to another insurance, like home or work)
Travel insurance (either independent of, or attached to your credit card)
Purchaser’s insurance or warranties (attached to your credit card)
Pet insurance
Insurance attached to any sports club, gym or community group that you are part of
There are then insurances that you should have, but don’t fit into the category above of insurance that you probably already have, like:
Life insurance independent of your superannuation
Key person insurance
Professional indemnity insurance (if you do any side hustles)
Contents insurance and indemnity insurance if you live in strata or rent
Why does it matter?
It matters for two reasons. Firstly, you may be paying too much. You may be paying twice for two insurance policies that cover the same thing, and you may not get two payouts. You can often have two life insurance policies, read more on that here, but other insurance policies like car insurance or house insurance typically will not pay out twice.
Secondly, you may not have the cover that you think you have in terms of either amount, or who gets paid out. All Estate Planning lawyers have had matters where someone is designated to receive the insurance pay out but it is clearly an old preference, such as giving it to your parents when you are married and have kids, or giving it to an ex-spouse because you haven’t yet updated your information. This is just another thing for your loved ones to deal with if you are injured or you have died, and it is something that you could help them with.
What should I do?
As simple as it sounds, find all of your insurance policies and make a list. Who is the insurance with, what is the account number, and how much is it for? Make sure you keep that list somewhere safe. Once you have made the list it will probably be obvious to you what the next step is, whether it is auditing your insurance policies (to get rid of any double ups, or to get a better deal) or increasing some of the balances (to protect your family).
If you are getting financial advice, which you absolutely should, having a list of things like your insurance policies will help.
If you want to get started with your own Estate Planning, then you could book a phone call with Janis to discuss that here.