Money

Why you need life insurance

Noel Whittaker
Noel Whittaker

WE all know that accident or illness can strike suddenly, and without respect for age or assets.

This leads to the vexed topic of life insurance, a subject to which most of us have a rather illogical reaction. We don't want to know about it; we avoid it, and yet when tragedy strikes we almost always wish we had taken out more.

So who needs it, and how much is appropriate? The first question is simply answered by asking; "what would happen if the breadwinner died, or was unable to work due to a serious accident or illness?" Obviously if you are single and living at home, or you have relatively small debts and a partner with a good income,  you probably have no need for life cover. But, if you have a large mortgage and dependants, you should be asking just how much is enough.

Think about a couple in their mid 30's, with children aged 14,10 and 8.  He earns $65,000 a year, and she earns $10,000 from casual work. Their debts total $200,000.

If he was killed, or became totally and permanently disabled, the family would need at least $1,300,000. This comprises $200,000 to pay off their debts, $1,000,000 to give the family an income to replace what he used to earn, and $100,000 to establish a fund for the children's education.

What is the most tax effective way to take out life insurance? Through superannuation - if the premiums are paid using salary sacrifice they are effectively tax deductible and for most people the benefits on death are tax-free. Also, by taking out insurance through your superannuation fund you can enjoy cheaper premiums as the large superannuation fund managers buy insurance wholesale and pass the savings on. As always, seek expert advice.

Noel Whittaker is a co-founder of Whittaker Macnaught Pty Ltd.  His advice is general in nature and readers should seek their own professional advice before making any financial decisions.  His email is noelwhit@gmail.com

Topics:  insurance life insurance noel whittaker



Improving community ties one cuppa at a time

COFFEE WITH A COP: Grafton Senior Constable Paul Johnston enjoys a chat with Swan Creek local Bob Green.

Coffee With A Cop initiative kicks off in Grafton

10 things to do this weekend

ON TOUR: Kasey Chambers and Bernard Fanning will play in Grafton this weekend as part of their Sooner or Later tour.

Looking for something to do?

A piece of Clarence Valley heritage up for grabs

The historic house \"Ravensford\" located at 36 Villiers St in Grafton is currently on the market at McKimms Real Estate.

Take a look inside iconic home 'Ravenford'

Local Partners

Improving community ties one cuppa at a time

CLARENCE Valley police pleased with the response from the first Coffee With A Cop initiative in Grafton.


Celebrating the Clarence Valley's unique story

Lynn Baker and Penny the detection dog. Penny will be in Grafton during Heritage Near Me Roadshow which arrive in early March. Photo: Jason O'Brien

Week-long celebration of Clarence Valley's heritage

Newcastle outfit to make Yamba go 'Crazy'

GROOVY POP: Crazy Old Maurice is take to the stage at the Pacific Hotel Sunday afternoon.

Looking for a way to spend a cruisy Sunday arvo?

Bernard, Kasey, Spooky Men, and more this weekend

Mal Eastick returns with his Blues Bar on Sunday at the Yamba Golf Club.

Touring shows bring mix of genres to Clarence

Living End, Grinspoon stars hit stage for American Idiot

GET a sneak peek at Green Day's American Idiot The Musical as we go behind the scenes to meet the stars at a QPAC rehearsal.

Samuel L Jackson dismisses La La Land ahead of Oscars

Ryan Gosling and Emma Stone in a scene from the movie La La Land.

Hollywood actor and Oscars voter says Denzel should win top gong

Former Family Matters stare accused of child abuse

Reginald VelJohnson, left, and Darius McCrary arrive at the TV Land Awards on Sunday, April 19, 2009 in Universal City, Calif.

Darius McCrary has been accused of child abuse

Bindi Irwin's birthday tribute to her dad

Bindi Irwin

Bindi Irwin has paid tribute to her dad on his 55th birthday

Reality TV show gives Maryborough a boost

*WARNING EMBARGOED until 9.15pm Monday January 30* Sean Hollands and Susan Rawlings pictured after their wedding on the TV series Married At First Sight. Supplied by Channel 9.

Maryborough looks good on reality TV show.

Buderim dad rejects gay son's emotional plea for second time

LOVERS: Grant and Chris have been together for more than three years, and Chris' parents refuse to acknowledge their son's fiance.

Son’s emotional plea rejected again by unmoved father

What's on the big screen this week

Ewan McGregor and Jonny Lee Miller in a scene from the movie T2: Trainspotting.

This week's new releases offer plenty of variety for movie buffs.

A piece of Clarence Valley heritage up for grabs

The historic house \"Ravensford\" located at 36 Villiers St in Grafton is currently on the market at McKimms Real Estate.

Take a look inside iconic home 'Ravenford'

$140k damage: landlord says property trashed, contaminated

He had what he calls "the tenants from hell"

Submarine, buses and 3000 tyres removed in $100K clean up

The list of things removed from this property is beyond astonishing

Houses selling like hot cakes

HIGH DEMAND: Maclean Valley 2 Coast principal Ingrid Nott.

Valley's housing market pushed by supply shortage and jobs growth

Ready to SELL your property?

Post Your Ad Here!