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Insurance for small business owners

Insurance for small business owners. Presenter: dd month 2016. [Adviser logo].

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Insurance for small business owners

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  1. Insurance for small business owners Presenter: dd month 2016 [Adviser logo]

  2. Disclaimer/AFSL details etcThis information is current at January 2016 and is subject to change. As this information (including the statements on taxation which are of a general nature only and based on current laws, rulings and interpretation) has been prepared without considering your objectives, financial situation or needs, you should, before acting on this information, consider its appropriateness to your circumstances. OneCare is issued by OnePath Life Limited (ABN 33 009 657 176, AFSL 238341) (OnePath Life) and OneCare Super is issued by OnePath Custodians Pty Limited (ABN 12 008 508 496, AFSL 238346, RSE L0000673) (OnePath Custodians). You should read the product disclosure statement, available at onepath.com.au, before making a decision about the products.

  3. About small business • 97% of Australia’s actively trading businesses are small businesses1 • 61% of small businesses have no employees2 • 66% of business owners are male3 • Just over a third of Australia’s business operators are women (34%), and their numbers are rising3 • ABS Media Release, March 2015 ‘The number of Australian businesses have increased’ • ABS Report, March 2015, Counts of Australian Businesses, including Entries and Exits, Jun 2010 to Jun 2014’ • ABS Report , 2015 ‘Profile of AUSTRALIAN WOMEN in BUSINESS’

  4. Who’s going to look after you? • If you’re self-employed you don’t have the same entitlements as employees: • No sick leave or annual leave • Generally no workers’ compensation insurance • No superannuation guarantee • When it comes to preparing for illness or injury, you need to do it yourself

  5. Protection for business owners • You also have more to protect... • Lifestyle expenses for yourself and your family • Mortgage/rent and personal debts Plus... • Business debts • Other fixed business costs • Personal guarantees or jointly-held loans

  6. Protection for business owners • If you were unable to work... • What would it mean for your income? • What about your family’s lifestyle? • How long would your personal savings last? • How long would the business survive? • How would you save for your retirement? • What would your business be worth?

  7. The need for protection • Workers compensation generally doesn’t cover injuries that happen away from work, or provide protection against serious illnesses. • Any social security payments may not cover your medical and living expenses. There may be waiting periods. • Private health insurance doesn’t help you with your everyday living expenses and is often capped.

  8. Protection for business owners • Life insurance strategies should consider the cost to: • Fund ongoing living costs for you and your family • Fund ongoing business expenses • Repay or service debts (personal and business) • Meet child education needs • Meet medical expenses • Maintain savings and retirement plans • Allow your spouse to take time off

  9. Did you know…? • According to a 2014 KPMG report1: • Only 27% of disability insurance needs are being met through existing cover • 35%of Australians have no form of disability insurance • According to research on the impact of the sudden disability of a parent2: • Before a parent became disabled,11% of parents without insurance rated finance as ‘struggling’. After disability, this rocketed to 62% • 75% of those without insurance agreed that in hindsight a policy covering disability would have helped KPMG report for Financial Services Council, 2014 IMPACT OF DEATH OF A PARENT ON SURVIVING PARTNER AND CHILDREN report. Research conducted by Ipsos on behalf of ANZ Wealth April – May 2015

  10. What about the National Disability Insurance Scheme? Does it replace the need for life insurance? No… here’s why: • Designed to help the most severely disabled people, not everyone who has a disability. • Doesn’t cover temporary conditions that may occur. Such as disabilities from a car crash or from a serious illness. • It’s main purpose is to give people who are severely and permanently disabled more personalised assistance and a greater connection with their community. Not financial support. • Available in limited regional areas, with roll out not until 2019/2020 • Even if you are eligible, it can’t help you eliminate debts, provide an replacement income or cover the out-of-pocket costs of medication and treatment.

  11. Protecting your true income • There’s more to income protection than reviewing your tax return... • Does your spouse earn an income from the business, and would it stop if you did? • Are you re-investing profits in your business? • What are you really worth to your business?

  12. OnePath, one of the market leaders for business owners • Flexible disability definitionhelps you stay in touch with your business as a small business owner. You may work up to 10 hours , or earn up to 20% of your pre-claim income, while receiving full benefits. • TPD of up to $10 million which allows you to take a higher level of cover to help fund a business buyout • Packaging discounts of up to 10% when you take out a policy with a spouse, immediate family member or business associate

  13. Types of cover available • Life cover for death and terminal illness • Helps the family reduce debts and stay in the family home • Help reduce business debts • Provides an ongoing income for the family • Pays medical bills and funeral costs • Allows funding for the replacement of the key person in the business • Income protection cover for sickness or injury • Helps families keep up with mortgage repayments and day-to-day living expenses • Premiums are generally tax-deductible

  14. Types of cover available • Total and Permanent Disablement (TPD) cover • Helps eliminate debts and cover long-term care costs • Pays for modifications to the family home • Allows funding for the replacement of the key person in the business • Trauma cover for serious illness • Pay out-of-pocket medical costs • Helps your spouse take time off work to provide care • Allows you to make lifestyle changes – like reducing work hours, or taking an extended holiday

  15. Types of cover available 2015 OnePath paid over $116 million in Income protection and business expenses insurance • Business expense cover for sickness or injury • Pays a monthly benefit to cover your fixed business expenses – such as tools and equipment hire, motor vehicle leases and advertising commitments • Helps keep your business running in your absence • Premiums are generally tax-deductible • Can fund a locum replacement in the business while you recover

  16. Advice about life insurance • It’s important people seek tailored advice that takes into account their income, debt levels, family status etc • A financial adviser can help with strategies to make life insurance more cost-effective, including insurance inside super

  17. Thank you Questions?

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