Speaker 1: Hello, my name's Santasha Nabananga Bamblet. I'm a proud yr
Speaker 1: the Order Kernye Whoalbury and a waddery woman. And before
Speaker 1: we get started on She's on the Money podcast, I
Speaker 1: would like to acknowledge the traditional custodians of the land
Speaker 1: of which this podcast is recorded on a wondery country,
Speaker 1: acknowledging the elders, the ancestors and the next generation coming
Speaker 1: through as this podcast is about connecting, empowering, knowledge sharing
Speaker 1: and the storytelling of you to make a difference for
Speaker 1: today and lasting impact for tomorrow.
Speaker 2: Let's get into it.
Speaker 3: She's on the Money, She's on the Money.
Speaker 2: Hello, and welcome to She's on the Money the Podcast
Speaker 2: Millennials who want Financial Freedom. Welcome back to another one
Speaker 2: of our Wednesday deep dive episodes where I'm usually joined
Speaker 2: by miss becksay Ed, but there's a different guy in
Speaker 2: front of me today, Mister Phil Thompson. What gives you
Speaker 2: the audacity to think that you should be on cheese
Speaker 2: on the money?
Speaker 4: I'm beck to, Oh God, you've got longer hair than yes.
Speaker 2: If you don't know the voice, I'm not surprised. It's
Speaker 2: because we always talk about Phil on the podcast yet,
Speaker 2: haven't had him on before. Phil is the CEO and
Speaker 2: director also a financial advisor at Sky Wealth, which if
Speaker 2: you've heard of before. Again, I'm not surprised because all
Speaker 2: I do is talk about the importance of life insurance TBD,
Speaker 2: income protection and making sure that you are protecting your
Speaker 2: income because to me, that is the biggest asset that
Speaker 2: you will ever have in your life. And Phil, I
Speaker 2: thought the end of January, it's now time to give
Speaker 2: my community and absolutely kick up the pants to get
Speaker 2: their personal insurances sorted because arguably it's more important now
Speaker 2: than ever, especially during a cost of living crisis where
Speaker 2: everybody is so stressed about finances and also we all
Speaker 2: seem to think that we're a little bit untouchable. Yeah,
Speaker 2: so Phil TLDR, I want to know what do you do?
Speaker 2: Why do you do it?
Speaker 4: Yeah, So we're a financial advice for We just specialize
Speaker 4: in personal insurance. So that's all we do. So anyone
Speaker 4: who needs investment advice, touberranuation advice, that's not what we do.
Speaker 2: You're not the guy.
Speaker 4: Yeah, we're not the people for that. So we just
Speaker 4: do personal insurance. We just help people decide how much
Speaker 4: cover they need, and we work collaboratively with our clients
Speaker 4: about the level of cover.
Speaker 2: Just decide how much you need. You also talk about
Speaker 2: like how important it is and understanding the claiming process
Speaker 2: and all of the other stuff. I feel like that
Speaker 2: simplifies it too much. Direct You don't just go, oh
Speaker 2: you need X, yeah, thank you.
Speaker 4: We talk about the need. Really, it's just about, like,
Speaker 4: you know, how much insurance do you need? What are
Speaker 4: the terms of that policy going to look like? So
Speaker 4: we'll discuss potential exclusions, loadings, and then we'll talk about cost.
Speaker 4: At the end of the day, insurance costs money, so
Speaker 4: it's just about getting that balance between the level of
Speaker 4: cover that's appropriate and what's an affordable cost.
Speaker 2: Yeah, and I am really really passionate about personal insurances.
Speaker 2: I think it's the one thing that you should really
Speaker 2: be prioritizing. Let's do a really quick basic recap. So
Speaker 2: we've obviously done episodes on Cheese on the Money before
Speaker 2: about what personal insurances are, and I have discussed the
Speaker 2: four main types of personal insurances. Feel that you would write.
Speaker 2: So we've got life cover, so death insurance basically really
Speaker 2: easy to claim, Like, let's be honest, pretty simple criteria.
Speaker 4: Yeah, if you pass away, there are things like terminal illness,
Speaker 4: So if you've got less than twenty four months to live,
Speaker 4: you may be able to get that life insurance paid
Speaker 4: out early.
Speaker 2: Then we have KEPD, which is total and permanent disability insurance,
Speaker 2: then trauma insurance, and then we've got income protection, which
Speaker 2: is arguably my favorite type of insurance. Did you know
Speaker 2: people have favorite types of insurance or is it just
Speaker 2: like the people in this room.
Speaker 4: Right now maybe have favorite type and skes.
Speaker 2: Yeah, let's break them down a little bit before we
Speaker 2: dive into it, because I don't want to assume that
Speaker 2: everyone is just looking at this going like, oh great,
Speaker 2: Phil can help me with my car insurance. That's not
Speaker 2: what you do. So let's start with arguably my favorite
Speaker 2: type of insurance, income protection. Why do we need it,
Speaker 2: what is it, how do we get it? And why
Speaker 2: should we not just rely on the fact that we
Speaker 2: have two years cover in our super sometimes.
Speaker 4: Yeah, income protections is the most important because your incomes
Speaker 4: are the most important. When everyone thinks about their financial
Speaker 4: goals and objectives that they want to achieve, they need
Speaker 4: their income to be able to achieve it. And so
Speaker 4: we need to be able to protect that income if
Speaker 4: something bad happened. So a lot of super cover will
Speaker 4: cover up to two years. And so what that means
Speaker 4: is if you're injured, ill, sick, can't work for most reasons,
Speaker 4: then you'll get paid a monthly payment from the insurance
Speaker 4: provider after that initial waiting period, so you've got to
Speaker 4: wait a certain amount of time. So it's kind of
Speaker 4: like car insurance excess. You've got to pay a certain
Speaker 4: amount with car insurance excess. So that's the waiting period.
Speaker 4: For that waiting period, you get your monthly payment until
Speaker 4: you're back at work. So if you're only out of
Speaker 4: work for six months, then the payments stop once you're
Speaker 4: back at work. If you can't ever work again, then
Speaker 4: you'll get paid or up until the benefit period. So
Speaker 4: most super funds will have a benefit period of only
Speaker 4: two years, but you can get income protection with a
Speaker 4: benefit period till age sixty five.
Speaker 2: I feel like I've had a lot of conversations, especially
Speaker 2: in my community over the last few years, where people go, oh, well,
Speaker 2: I only need two years, it'll sort out.
Speaker 4: Then.
Speaker 2: Is that the reality of the circumstance, Phil.
Speaker 4: Yeah, it's really interesting. So most claims are less than
Speaker 4: two years, so the majority of claims that are paid
Speaker 4: out finish within two years. However, majority of the money
Speaker 4: insurance companies pay is for the income protections claims that
Speaker 4: go over two years. So what that means is statistically
Speaker 4: you're less likely to need it after two year period,
Speaker 4: but the majority of the payments that are paid out
Speaker 4: is for that long term claim. So it's a matter
Speaker 4: of going, do I want to protect the biggest downside risk,
Speaker 4: which is I can never work again. So that's what
Speaker 4: that age sixty five benefit period policy covers the biggest
Speaker 4: downside risk. If I just want to cover the majority
Speaker 4: of times I'm going to need it, well, yeah, a
Speaker 4: two year benefit period's okay, but you're going to lose
Speaker 4: millions and millions of dollars worth of benefits if you
Speaker 4: don't have that longer term benefit period policy.
Speaker 2: And there are a lot of reasons why it's so
Speaker 2: important to consider the amount of times people are like, oh,
Speaker 2: but that's okay, Like, you know, if something happens, I'll
Speaker 2: move back in with my parents for a little while,
Speaker 2: or you know, don't worry, like I can always apply
Speaker 2: for sentling. And if you're in a circumstance where your
Speaker 2: income is essentially equivalent to seniling. I totally understand why
Speaker 2: you might do that. But phil you're a dad, you've
Speaker 2: got three beautiful girls, would it be appropriate to not
Speaker 2: have income protection in your circumstance?
Speaker 4: No, not at all. I mean, my wife's currently not
Speaker 4: earning an income and she's trying to write a book
Speaker 4: and it's amazing. But if I wasn't able to earn
Speaker 4: an income would be stuffed. So that's why, you know,
Speaker 4: it's kind of like home insurance. If I've got a
Speaker 4: home that's where half a million dollars or a mooion dollars,
Speaker 4: Do I want to cover fifty thousand dollars because most
Speaker 4: of the claims that only cover fifty thousand dollars? Or
Speaker 4: do I want to cover the moon dollar house that
Speaker 4: if it burned down or I could fully replace it.
Speaker 4: So that's why I'm a big believer in a long
Speaker 4: benefit period and making sure that you cover the right
Speaker 4: level of cover for your income.
Speaker 2: Yeah, I was a little bit cheeky. Obviously, I had
Speaker 2: the privilege of being a financial advisor when I was younger,
Speaker 2: ah younger, and so I actually set up my income
Speaker 2: protection when I was fit and healthy and hadn't had
Speaker 2: any babies and didn't have a lot of health complications.
Speaker 2: Should we be setting up our income protection once you know,
Speaker 2: life gets serious, like we're a dad of three, or
Speaker 2: should we be doing what Victoria did and set it
Speaker 2: up when they're young and go, Hm, the policy is
Speaker 2: a lot cheaper now. It's like, when do we try
Speaker 2: and talk about income protection?
Speaker 4: Yeah, I mean it's an interesting conversation. I like to
Speaker 4: set up early. The earlier you are, the less health
Speaker 4: complication you have. Generally speaking, so the earlier the better.
Speaker 4: But also just from a financial point of view, as
Speaker 4: a twenty five year old, if you've got a full
Speaker 4: time income, and think about that income, if you couldn't
Speaker 4: work until a sixty five retirement age, or by the
Speaker 4: time a twenty five year old gets to retirement, it'd
Speaker 4: be seventy five. So the long term cost of that
Speaker 4: loss of income is actually greater for a twenty five
Speaker 4: year old than it is for a fifty five year old.
Speaker 4: Even though you may have less financial obligations, you may
Speaker 4: not have a family yet, you may not have a house.
Speaker 4: That loss of income is actually much greater. So when
Speaker 4: we're talking specifically income protection. The earlier the better. When
Speaker 4: we're talking about things like life insurance, which I'm sure
Speaker 4: we'll get to, maybe that's not necessary for someone who
Speaker 4: doesn't have dependence, doesn't have a mortgage. So for income protection,
Speaker 4: the earlier the better.
Speaker 2: Yeah, I agree, and I think that's why it's one
Speaker 2: of my favorite types of insurance, which, honestly, the more
Speaker 2: I say it, the more I'm like, you're a bit
Speaker 2: of a loser, Victoria. But it's my favorite type because
Speaker 2: I think it's applicable across the board, and it's not
Speaker 2: necessarily one that you can switch on and off. If
Speaker 2: you have an income, it is a no brainer to
Speaker 2: me to protect that because how many times do you
Speaker 2: see people buying new cars and they're so happy to
Speaker 2: pay for the extra insurance, and they're like, oh no,
Speaker 2: I wouldn't just get third party, I'd get comprehensive because
Speaker 2: that's so important. I go, but what about you? What
Speaker 2: if you can't work? Like if I crash my car tomorrow,
Speaker 2: Phil and it doesn't have any insurance on it, let's
Speaker 2: pretend I did pay for third party, because we don't
Speaker 2: want to implacate anybody else. But I'm out of car,
Speaker 2: and I'm going to go to work, and I'm going
Speaker 2: to earn an income and I'm going to save up
Speaker 2: and buy another car. And it's not the biggest deal
Speaker 2: in the entire world. Yes, it's a lot of money,
Speaker 2: and yes it's going to feel like trash not having it,
Speaker 2: lots of regret. But you know what's worse. If you
Speaker 2: have a fully functioning car and then somehow you've injured yourself.
Speaker 2: You can't drive your car, you can't go to work,
Speaker 2: you can't earn an income, and all of a sudden,
Speaker 2: the car A payments are unobtainable, You're not able to
Speaker 2: keep that, you have to move back in with mum
Speaker 2: and dad, you have to change your lifestyle significantly. And
Speaker 2: while yes most claims are under two years, if they aren't,
Speaker 2: you've actually shot yourself in the foot for your entire life.
Speaker 2: So your goals, your values, what you wanted to achieve
Speaker 2: in your life, it's just not going to happen in
Speaker 2: the same way. Whereas I look at income protection and go, well,
Speaker 2: it's not just income protection, it's kind of like life
Speaker 2: and goal and value protection. Because if something happened to
Speaker 2: me and I can't work every again, well, at least
Speaker 2: I get to kind of have the lifestyle within the
Speaker 2: breadths of my illness that I really want to have,
Speaker 2: and I'm not constricted by the fact that now I
Speaker 2: basically have to be centrally. Can I just go from
Speaker 2: hypothetically earning eighty or ninety thousand dollars a year down
Speaker 2: to forty thousand dollars a year and scrimping by And
Speaker 2: it's a situation I didn't technically have to put myself in.
Speaker 2: So I'm wildly passionate about it, mainly because I'm very
Speaker 2: black and white. I'm like, it just makes sense, guys.
Speaker 4: The other thing I was going to say is a
Speaker 4: lot of people come and say, well, I've got some
Speaker 4: work cover, work cover will pay me. The great thing
Speaker 4: about income protection you can be traveling overseas and injure
Speaker 4: yourself still be eligible for a claim of fair income protection.
Speaker 4: You can be at home looking after the kids and
Speaker 4: you know, pull your back because you're playing with the
Speaker 4: kids like I do every second week.
Speaker 2: It feels like, yeah, I still feel like that, and you.
Speaker 4: Can claim when you're income protection. So with the income protection,
Speaker 4: not like work cover, work cover, you need to prove
Speaker 4: that it was a workplace injury before you'll get paid
Speaker 4: any work cover income protection. It really doesn't matter how
Speaker 4: it happened or what happened. It's just a matter of
Speaker 4: can you work or not. If you can't work and
Speaker 4: you meet the definitions of the policy, then you get
Speaker 4: paid out income protection.
Speaker 2: So I feel like insurance is something that a lot
Speaker 2: of us just go this happens to other people, not
Speaker 2: to me, or this is something that just isn't going
Speaker 2: to happen. I'm fit, I'm healthy. I've shared on the
Speaker 2: podcast before that I had to do an income protection
Speaker 2: claim a while ago. For I would say friend, they're
Speaker 2: now a friend because I've exited the industry. But just
Speaker 2: like somehow managed to keep him as a pow. But
Speaker 2: he was the fittest, healthiest guy I ever met. Like
Speaker 2: you know the guy that gets up at like five
Speaker 2: am so they can cycle for two and a half
Speaker 2: hours before work. Can you just be like the red Yeah,
Speaker 2: like the boy, like he was crazy, Like his diet
Speaker 2: was immaculate. Like every time we went to the beach,
Speaker 2: I'd be like, nobody else is going to be happy
Speaker 2: wearing swimsuit around you mate, Like you are putting us
Speaker 2: all to shame. He got hit by bus and he's
Speaker 2: fine now, so it's okay. But he was riding the
Speaker 2: same path that he rode every other morning because, as
Speaker 2: I said, happy like her guy, he got hit by
Speaker 2: a literal bus and broke his pelvis in like four
Speaker 2: different places. Couldn't go to work, you know, had a
Speaker 2: whole heap of other broken bones as well, but in
Speaker 2: addition to that, had a whole heap of spinal injuries
Speaker 2: that needed long term support for and he's still on
Speaker 2: income protection because he cannot go back to work. He
Speaker 2: was a chippy. What are you going to do at
Speaker 2: work if you've broken all of your bones and you
Speaker 2: know you can't stand prolonged periods of time. He could
Speaker 2: have been completely wiped. And I mean he was a jippy.
Speaker 2: He was self employed, he had a pretty good income
Speaker 2: well able to prove all of that. And now he's
Speaker 2: still able to support his family and do exactly what
Speaker 2: he needs to do. But to me, that was always
Speaker 2: a really good example of I remember rolling on into
Speaker 2: work that day, I had a coffee in my hand,
Speaker 2: and I sat down at my desk and like I
Speaker 2: had a miscall on my phone, and to be honest,
Speaker 2: hadn't really thought about it, got an email and went, oh,
Speaker 2: I need to call. Like it was one of those
Speaker 2: things that even shook me as a financial advisor, because
Speaker 2: I think sometimes when you're doing things like income protection insurance,
Speaker 2: it's for illnesses that are prolonged, and often you go, oh,
Speaker 2: they've been saying they're not being well, or they've been
Speaker 2: going through testing, or it doesn't come as a shop.
Speaker 2: But to me, I was like, life is really fragile
Speaker 2: and really dangerous. Have you had a lot of claims
Speaker 2: like that?
Speaker 4: Yeah, I mean most of our claims people wouldn't have
Speaker 4: thought it happened. We've got you know, a lady who
Speaker 4: is thirty four had breast cancer four months after her
Speaker 4: trauma and income protection was put in place, and she
Speaker 4: was arming and Ring and I looked back. We'd spent
Speaker 4: like six months working with her kind of you know,
Speaker 4: trying to work out if the premiers were okay, and
Speaker 4: she was arming, and Ring finally went ahead and said, oh,
Speaker 4: I probably don't need this. Four months later was on
Speaker 4: income protection and got a trauma payment. One of my
Speaker 4: really really close friends, the first day of the work
Speaker 4: year last year, gave me a call and he works
Speaker 4: in the industry, and I said, I know you're not
Speaker 4: meant to be working a day, Get off your phone,
Speaker 4: get off your emails, and he's like, well, it's actually
Speaker 4: a personal call. I've just found out I've got pancreatic cancer.
Speaker 4: And so, you know, my first work day of last year,
Speaker 4: I went to the hospital and he's been on income
Speaker 4: protection for twelve months, got a trauma payment as well,
Speaker 4: and the first day of this year, unfortunately, we submitted
Speaker 4: a terminal illness claim for his life policy, so he
Speaker 4: got paid his trauma payment, he got twelve months worth
Speaker 4: of income protection, and now he's getting his life insurance
Speaker 4: paid out early while he's still around. And for him
Speaker 4: it's incredibly important. He's got two young boys, just a
Speaker 4: year younger than two of my oldest girls, and for
Speaker 4: him it's so important for the money to hit his
Speaker 4: bank account before he passes away.
Speaker 2: He knows, and he knows.
Speaker 4: They're going to be comfortable financially and not struggle because
Speaker 4: his wife isn't working. And so yeah, I mean it's
Speaker 4: obviously hard to talk about, you know, given you know
Speaker 4: he's a client but also a really close friend. We've
Speaker 4: been working together for eight.
Speaker 2: Years and this happens right, like, and he.
Speaker 4: Is incredibly fit, Like he is the same guy like
Speaker 4: to me, I look back and go, well, that's why
Speaker 4: I don't go to the gym, because because may have
Speaker 4: bank out of cancer. And so yeah, it's really full
Speaker 4: on in the work we do helping people with claims.
Speaker 4: But that's why, like especially this year, it's so important.
Speaker 4: The work I do is helping people get insurance. And
Speaker 4: of course it's a cost. All insurance costs money, and
Speaker 4: it's about strucking that balance which in a level of
Speaker 4: covering the cost. But some covers better than nothing. Because
Speaker 4: my good friend, you know, we had a conversation many
Speaker 4: many times about getting insurance and he worked in the
Speaker 4: industry and now he's got it and it's getting paid
Speaker 4: out and it's my massive difference for his.
Speaker 2: Family that actually kills me. You have been a financial
Speaker 2: advisor for years and years and years, and I have
Speaker 2: no NWS since before you were doing just insurance only advice.
Speaker 2: And I remember how long ago was it that you
Speaker 2: decided to delve just straight into insurance.
Speaker 4: Yeah, twenty twenty.
Speaker 2: Yeah, so I remember you called me and you're like,
Speaker 2: I'm thinking this model it's going to work. Like and
Speaker 2: I just remember I think it was like during COVID,
Speaker 2: I was having these conversations with you about what it
Speaker 2: looks like and how it was going to work, and
Speaker 2: I just remember going, you're insane, Like you know, I
Speaker 2: at the time was a holistic financial advisor, and I
Speaker 2: was like, I really, you know, like being able to
Speaker 2: provide the value to the client, to be financial advice
Speaker 2: when it comes to investment and insurance and then their
Speaker 2: savings and goals. And now I look at it and go, Victoria,
Speaker 2: you are so silly. Phil's model is genius because you
Speaker 2: know the inside outs of the insurance world. You're not
Speaker 2: just looking at you know, investment, which, to be honest,
Speaker 2: if you're a financial advisor, that often takes up a
Speaker 2: lot of time, and you know, I'm not throwing other
Speaker 2: financial advisors under a bus because that was me as well.
Speaker 2: But often if you're a financial advisor that does investment
Speaker 2: insurance and you know budget, cash flow, goal, savings and superannuation,
Speaker 2: insurance kind of becomes what I would call a hygiene factor.
Speaker 2: You kind of tick a box and go, well, my
Speaker 2: client needs that, will get it away. But I'm excited
Speaker 2: about the investment side of things. So as much as
Speaker 2: you focus on it and you kind of hear about
Speaker 2: it every day, you're not in the trenches every single
Speaker 2: minute of every single day. And now looking at your
Speaker 2: business model and my client's experiences, because when I exited
Speaker 2: the industry, I did handball a lot of people over
Speaker 2: to you to be like, please look after these clients
Speaker 2: really well because I'm legally not allowed to anymore, and
Speaker 2: even our community coming back and being like, oh my gosh,
Speaker 2: I'm so glad I spoke to Phil's team. Talk to
Speaker 2: me about why you made that choice, but also why
Speaker 2: it's important that you've made that choice, especially because not
Speaker 2: everybody knows this, but the industry has changed so much
Speaker 2: since then.
Speaker 4: Yeah, it's a good question, just from a business point
Speaker 4: of view, the way you do this. Financial advisors on
Speaker 4: Mass are moving away from insurance advice, and so a
Speaker 4: part of me thought, well, it's a great space to
Speaker 4: be and if everyone's getting out but the need is still.
Speaker 2: There or being wrongs in your head, or you're really smart.
Speaker 2: Turns out he was really smart.
Speaker 4: Guys not too sure. We're still undecided about that. So
Speaker 4: I moved into it because you know, the need for
Speaker 4: insurance is still there and is growing. We're getting wealthier,
Speaker 4: so they need to protect that wealth is getting more.
Speaker 4: So I've still got a lot of respect for holistic
Speaker 4: advice firms and advisors, and we refer a lot of
Speaker 4: business to do it exactly. And so the reason I
Speaker 4: made that choice is because I feel like, unfortunately, financial
Speaker 4: advice is very expensive for holistic advice, so focusing on
Speaker 4: one area of the advice need, we can help our
Speaker 4: clients make a really informed decision about a really important
Speaker 4: financial product, which is insurance at a much lower cost
Speaker 4: and a holistic plan can cost. You know, there was
Speaker 4: a point where, you know, we had to change five
Speaker 4: fair thousand dollars for an upfront plan for holy time.
Speaker 2: That's what I used to do. So I remember I
Speaker 2: would talk to people and be like, oh yeah, and
Speaker 2: like my standard fee for completely holistic advice was about
Speaker 2: six and a half thousand dollars, right, And you put
Speaker 2: that number on the table and it terrifies people, especially
Speaker 2: my community who were often starting with Lukvi. I've saved
Speaker 2: my first five grand and really excited to get into
Speaker 2: investing and creating wealth for myself, and I'd often have
Speaker 2: to say, please, don't come and see me then like,
Speaker 2: and I think that's one of the reasons I exited
Speaker 2: the industry because I was like, I'm not able to
Speaker 2: have the impact that I want to have. But when
Speaker 2: you break it down with how much time is spent
Speaker 2: on crafting a plan and doing research and the compliance
Speaker 2: these days, to me is insane, Like I feel like
Speaker 2: I fell in the same form, five different places to
Speaker 2: go to, five different people to make sure that you
Speaker 2: are putting the client in the right position. And please
Speaker 2: don't get me wrong, it's a centin sure, like after
Speaker 2: the Royal Commission, all of these things make sense. But
Speaker 2: then you're spending an hour in a meeting with a
Speaker 2: client for which fil you would understand this too. Then
Speaker 2: you spend an hour writing notes of what happened in
Speaker 2: the meeting because you have to file note it and
Speaker 2: when it comes out in the wash, there's not a
Speaker 2: lot of profit there because you're paying your admin staff,
Speaker 2: you're paying your power planners, you're paying for you know,
Speaker 2: your overheads. Even a financial services license just to cool
Speaker 2: yourself a financial advisor is insane, Like, you know, I'm
Speaker 2: happy to talk about it, but my financial services license
Speaker 2: historically has cost a minimum of fifty thousand dollars a year.
Speaker 4: And then on top of.
Speaker 2: That, my licensee was taking five percent of whatever I made.
Speaker 2: And that's normal, Like, that's actually a pretty good deal.
Speaker 2: Like if you look at it, you go, yeah, all right,
Speaker 2: all that makes sense. Usually it caps out at the
Speaker 2: first million dollars you make. That is not the reality
Speaker 2: for most advisors. But you go, oh, okay, no worries.
Speaker 2: That makes sense because they do do a really good
Speaker 2: job when it comes to making sure that your client
Speaker 2: is protected. All of that overhead.
Speaker 4: It's not a lot of profit exactly. And when you
Speaker 4: talk about a five thousand dollars plan for the average
Speaker 4: Australian where the business itself isn't making much money, it
Speaker 4: doesn't work that well. You know, I grew up in
Speaker 4: a very middle class Australia and I'm passionate about, you know,
Speaker 4: the everyday Austraian getting advice. The difficulty with it getting
Speaker 4: holistic advice is it's too expensive. So what I decided
Speaker 4: to do is I will help people make an informed
Speaker 4: decision about one financial product, which is insurance. Now we
Speaker 4: charge three hundred and thirty dollars for individuals and four
Speaker 4: ninety fives for couple, so it is much lower than Holy.
Speaker 2: Shit, it's not six and a half grand.
Speaker 4: No, I'll charge you six and a half grand if
Speaker 4: you probably have. The reason we can make it much
Speaker 4: more affordable is because there is commissions on the insurance products.
Speaker 4: So when we set up the insurance, we get paid
Speaker 4: a commission from the insurance provider. Now it's all standardized
Speaker 4: in terms of the commission rate, and you know it
Speaker 4: was actually before the Royal Commission there was changes with
Speaker 4: the commission rate, so it's all standardized. So whether we
Speaker 4: go with you know, one insure or the other.
Speaker 2: Yeah, there's no actual financial incentive anymore. Because don't get
Speaker 2: me wrong. If people are like there is, I'd be like, yeah,
Speaker 2: there used to be. There is now no financial incentive
Speaker 2: to pick you know, one path over AIA, like it
Speaker 2: doesn't actually matter, which I know most of the good
Speaker 2: advisors never cared about to begin with, because that wouldn't
Speaker 2: have been the ethical thing to do. However, it does
Speaker 2: put the consumer in the best possible position to go.
Speaker 2: I know, Phil can't take me for a ride because
Speaker 2: it's literally illegal.
Speaker 4: Yeah. Correct, So that's kind of why we went to
Speaker 4: insurance only because I'm very passionate about helping everyone. We
Speaker 4: want to make advice really simple, we want to make
Speaker 4: it affordable. That's kind of our mission at Sky. So
Speaker 4: that's why I went to insurance. It made up a
Speaker 4: really small portion of our business. I kind of dabbled
Speaker 4: since going there. It's so much more complicated than I
Speaker 4: ever thought. I thought it was simple, a level of
Speaker 4: Carba picking. It is your own happy days, and you know,
Speaker 4: getting into it specializing, you learn how much more complicated
Speaker 4: it actually is. So you know, what we do is
Speaker 4: we pair the insurance provider with the clients based on
Speaker 4: their personal medical history. So insurers, you'll get three different
Speaker 4: insurance companies will provide us what's called a pre assessment,
Speaker 4: so we get some medical information up front, we send
Speaker 4: it to insurers and say how would you assess a
Speaker 4: potential application? And they come back. One says we'll put
Speaker 4: an exclusion for this, one says what's called standard rates,
Speaker 4: so no exclusions are loading. And another will say that
Speaker 4: they're going to put a loading on the premium, so
Speaker 4: charge more for that premium. And so we'll then go, okay,
Speaker 4: let's look at the premiums and maybe the one with
Speaker 4: standard rates their base rate is more expensive, but it
Speaker 4: doesn't have an exclusion, and it's you know, we're not
Speaker 4: factoring that loading. And so that's the insurance provider we're
Speaker 4: going to recommend for our clients. So we provide that
Speaker 4: we do all the research in terms of our process,
Speaker 4: but we make that assessment on which insurance provider we
Speaker 4: make an assessment and a recommendation on the level of cover,
Speaker 4: and then we discuss the premiums, how to fund the premiums.
Speaker 4: Can you pay for the premiums from your super fund?
Speaker 4: How much is coming from your bank account? And then
Speaker 4: we talk about a mix of it comes up with
Speaker 4: these premiments, do we need to make any adjustments, and
Speaker 4: then we go from an application and we apply for
Speaker 4: the cover from there.
Speaker 2: Yeah, it's a lot more complex. I remember at the
Speaker 2: end of my financial advice career, I was talking to
Speaker 2: you so often. I was like, I'm done, I can't
Speaker 2: do this, Like there's just so many changes and so
Speaker 2: many hoops and so many things to get through. And
Speaker 2: I think that insurance over the last ten years has
Speaker 2: really i would say, knuckled down even on just exclusions
Speaker 2: and what they will and won't accept. And I'm seeing
Speaker 2: a lot was seeing and I'm sure you're seeing now
Speaker 2: a lot of people in circumstances where they actually just
Speaker 2: can't get cover because they have experienced significant health issues
Speaker 2: along the way, and the insurer is actually doing what's
Speaker 2: best for the insurer. They're not trying to crucify you,
Speaker 2: they're not trying to be rude, they're not discriminating. They're
Speaker 2: just going, hey, Phil, well, actually you've had all these
Speaker 2: health conditions and the reality of the circumstance is that
Speaker 2: you're probably going to get more and it's not a
Speaker 2: very good business decision for our insurance company to then
Speaker 2: offer you cover because we're going to pay through the
Speaker 2: nose for this. Like they're managing their risk and assessing that.
Speaker 2: That's what their job is, to assess risk, make sure
Speaker 2: that they're ensuring people that hopefully aren't going to get sick.
Speaker 2: But if that comes up, then they're like, yeah, okay,
Speaker 2: fair game, no worries, we'll absolutely pay out on that.
Speaker 2: But I think there's this misconception that if we go
Speaker 2: and say, well I want personal insurance, you will be
Speaker 2: able to get it. How often are you having a
Speaker 2: conversation with people where you go, look, you could probably
Speaker 2: get this insurance and we could probably set up some
Speaker 2: life but like your income protection might be more impacted
Speaker 2: than not. What does that look like? Because I feel
Speaker 2: like a few people in our community have had that
Speaker 2: question recently where they're like, well, I went to see
Speaker 2: an advisor. Obviously it wasn't you feel but I went
Speaker 2: to see an advisor and they said that I couldn't
Speaker 2: get covered, and I just think that's a joke, and
Speaker 2: you go, oh, like actually they were probably right.
Speaker 4: Yeah, yeah, So I mean there's a few things there.
Speaker 4: So how often do we see people get certain covers
Speaker 4: and not other covers? Yet we see it sometimes, but
Speaker 4: we work with all insurers, so you know, sometimes one
Speaker 4: insurance company will say no, but five others will say yes.
Speaker 4: So that's kind of sometimes. We see it a lot
Speaker 4: with our clients when they go to their super fun
Speaker 4: and they say, hey, can I get covered? And they
Speaker 4: get decliented and they think that's the rule across the insurance.
Speaker 2: I just can't get insured.
Speaker 4: Now I can't get it anymore because my super fund
Speaker 4: said no. Well, the issue is the super Fun only
Speaker 4: works with one insurance company, so that one insurance company
Speaker 4: has made an assessment that they're not offering cover, but
Speaker 4: there's plenty others, well, not plenty, there are some others.
Speaker 4: Others aren't that many film yeah, and some others may
Speaker 4: be willing to accept their isk. So our job is
Speaker 4: we work with all the insurers. So we say, well,
Speaker 4: these four insurance companies are going to say no, but
Speaker 4: these two will say yes. And then from these two,
Speaker 4: let's look at, okay, which one do we think is
Speaker 4: a better contract, which is price better, and then we'll
Speaker 4: make a recommendation. But life insurance and trauma insurance generally
Speaker 4: get a very similar assessment. Income protection and disability will
Speaker 4: also get the same assessment, so you may get an
Speaker 4: exclusion on income protection and disability or TPD that life
Speaker 4: insurance doesn't have. So a very common one is mental
Speaker 4: health exclusion. So income protection and disability will have a
Speaker 4: mental health exclusion, but your life insurance and trauma policy
Speaker 4: won't have that exclusion. And we walk that through in
Speaker 4: our advice where we say, hey, this is what the
Speaker 4: likely terms will be. Now we haven't applied for the cover,
Speaker 4: so it could come back as a different outcome. It
Speaker 4: could be better, it could be worse, but this is
Speaker 4: what we expect. Exclusions on income protection, disability, and maybe
Speaker 4: standard rates on life insurance and trauma.
Speaker 2: Yeah, And I think the extra value there is you
Speaker 2: have that relationship with those insurers. So if you're with
Speaker 2: a client, say they are potentially going to get a
Speaker 2: mental health exclusion, before even submitting it, you have the
Speaker 2: ability to call up and have a chat and go,
Speaker 2: look what's the likelihood of this, Because no financial advisor
Speaker 2: ever wants to submit an application that gets declined because
Speaker 2: that will show up on the client's history and even
Speaker 2: in future when you're writing out your next fact find
Speaker 2: with a financial advisor to get insurance again with a
Speaker 2: different provider, you have to disclose if you've ever been
Speaker 2: denied insurance before. So often financial advisors, if there is
Speaker 2: the chance of having an exclusion, will be really hands
Speaker 2: on to make sure that if for any chance it's
Speaker 2: going to be declined, they know beforehand. So we hear
Speaker 2: you know what, Let's just withdraw that, not have a
Speaker 2: decline on your history, and find another way to make
Speaker 2: this work and make this happen. You just mentioned life cover,
Speaker 2: TBD and trauma insurance. So let's go to a really
Speaker 2: quick break because I feel like we've gone really deep,
Speaker 2: really quickly. On income protection and why insurance and why
Speaker 2: you do what you do, And on the flip side,
Speaker 2: let's go over why you'd have life cover, what TBD
Speaker 2: actually is, and what the difference between TBD and trauma
Speaker 2: insurance is. So guys don't go anywhere, all right, Phil,
Speaker 2: We are back, and I feel like all of these
Speaker 2: personal insurances get lumped into one. Sometimes you go, do
Speaker 2: you have insurance? Yeah, I've got it through Super What
Speaker 2: have you got through? And then you find out more
Speaker 2: often than not, they just have a really low level
Speaker 2: of life insurance, not usually trauma insurance because that's held
Speaker 2: outside of superannuation. They might have some TVD with really
Speaker 2: hard to claim benefits and maybe a two year income
Speaker 2: protection policy. So let's start here because I know this
Speaker 2: is kind of like the easiest to talk about insurance policy.
Speaker 2: What's life insurance?
Speaker 4: Well, life insurance is just a lump sum payment if
Speaker 4: you pass away, and that gets paid out to your
Speaker 4: estate or to know whoever you nominate to be a beneficiary.
Speaker 4: What if I'm not married, Well, it'll get paid out
Speaker 4: to your state, so your state will then determine who
Speaker 4: gets it. So if you're not married, you don't have
Speaker 4: a partner, then your parents will generally get it unless
Speaker 4: you will dictates somewhere else.
Speaker 2: And if I'm looking at life insurance and I am
Speaker 2: twenty one still live at home, where's the value in
Speaker 2: that versus I'm thirty five, I have two kids and
Speaker 2: a mortgage, So like, how do we assess how much
Speaker 2: life insurance need? Because I think my life's worth heaps,
Speaker 2: so I just want the most amount of life insurance.
Speaker 4: Well, you can really at the end of the day,
Speaker 4: there's no one stopping you from getting life insurance.
Speaker 2: More for me, that's weird.
Speaker 4: Well, I mean it's really a personal preference. But life
Speaker 4: insurance for that twenty one year old living at home,
Speaker 4: maybe there isn't a need. But sometimes, and actually quite often,
Speaker 4: what we see is adding life insurance brings the overall
Speaker 4: costs down because you group them all together. There's like
Speaker 4: grouping discounts. Often it costs less to have life insurance
Speaker 4: than it doesn't have it. So often we are telling
Speaker 4: that twenty nine year old have a million dollars of
Speaker 4: life cover because we think you need the disability cover
Speaker 4: of a million and it's going to save your overall
Speaker 4: having it, So we don't think you need it, but
Speaker 4: have it anyway. Here's all the numbers, and will prove
Speaker 4: that it's cheaper.
Speaker 2: Yeah, And I like that part of the process as well.
Speaker 2: I used to get a lot of enjoyment out of
Speaker 2: really getting my client to understand why I'm making the
Speaker 2: decisions I'm making, because there's literally nothing worse than thinking
Speaker 2: that your client might go to a barbecue be like, oh, yeah,
Speaker 2: I got my insurance is sorted. I'm a big dog
Speaker 2: like it's all sorted now, like best ever, and their
Speaker 2: mate goes, oh, what ones did you get? They go, oh, yeah,
Speaker 2: I got a million in life cover, and then all
Speaker 2: of a sudden, their mate's like, you don't need a
Speaker 2: million in life cover, Like that's ridiculous.
Speaker 4: Rah.
Speaker 2: The important thing about advice is also educating your client
Speaker 2: to understand will actually I have it for a good reason.
Speaker 2: It's not because you know, I need a million dollars
Speaker 2: if I pass away. It's because ABCD and E. The
Speaker 2: other thing I like about life cover obviously I'm entering
Speaker 2: a new stage of life now, I'm about to have
Speaker 2: a baby, which is crazy. I now have mortgages that
Speaker 2: I didn't have when Phil you set up all of
Speaker 2: my insurances to begin with, and we are going through
Speaker 2: the process at the moment. By going through the process,
Speaker 2: I mean I have been avoiding Phil's emails for the
Speaker 2: last six months, but we're going through the process at
Speaker 2: the moment of increasing my husband's and my life insurance
Speaker 2: and income protection and trauma and all of that fun stuff.
Speaker 2: But my I guess responsibilities are much higher now. But
Speaker 2: also a commonversation that I like having around life insurance
Speaker 2: is really that legacy piece and going well, Actually, I
Speaker 2: can leave my family and my friends and you know,
Speaker 2: the world in an even better place than it was beforehand.
Speaker 2: What does that look like? Are these conversations that you're
Speaker 2: having with clients often or is it just me because
Speaker 2: I'm a little bit hippidipy.
Speaker 4: In terms of legacy? Yeah, yeah, I mean it's something
Speaker 4: I haven't factored in too much. For me. Life insurance
Speaker 4: is just, as you said, a hygiene factor. If you've
Speaker 4: got kids, you got a mortgage, it's kind it's cheap, comparative,
Speaker 4: it's probably the cheapest insurance you'll ever have in your life.
Speaker 4: So it's comparatively cheap, and it just makes sense. If
Speaker 4: you got a mortgage, you've got kids, it's kind of
Speaker 4: a no brainer. But in terms of that legacy, it's
Speaker 4: probably something I'll have more conversations these days, because, as
Speaker 4: I said, at the start of this year, I met
Speaker 4: with a friend who's about to pass away, and it
Speaker 4: was so important for him to have a legacy for
Speaker 4: his boys. He was allocating his super balance into a
Speaker 4: trust fund for his boys, and the insurance payment was
Speaker 4: for his wife to pay off the mortgage and to
Speaker 4: afford the lifestyle of being without him. So historically, I'm
Speaker 4: very pragmatic. It just makes sense. This is the game.
Speaker 2: I'm very black and white as well.
Speaker 4: It's very it makes sense. Just do it well.
Speaker 2: It makes sense. But then also if you want to
Speaker 2: take it a step further, like hypothetically something happens to me.
Speaker 2: I don't want to leave Steve with a mortgage that
Speaker 2: is going to be really hard to pay off because
Speaker 2: right now we're a jewel income household. You know, we
Speaker 2: both contribute to this. I don't want to leave him
Speaker 2: with a child that he goes far out, like daycare
Speaker 2: is so expensive, but I need to go to work
Speaker 2: to provide for this family. But if I stay home,
Speaker 2: like I don't want to leave this situation won't ever
Speaker 2: be by choice, but if I hypothetically did leave the
Speaker 2: situation yesterday, I want him to be able to be
Speaker 2: as successful and thrive as much as possible after I'm
Speaker 2: not there, Whereas if I didn't have this insurance, my
Speaker 2: husband would probably have to sell the house, probably change
Speaker 2: all of our plans around what education looks like, about
Speaker 2: where we want to live, about what we want to do,
Speaker 2: and make his life significantly harder. It's obviously going to
Speaker 2: be the hardest ever not having me. On top of that,
Speaker 2: it's just kind of like the peace of mind knowing
Speaker 2: he would not have to stress about the financial aspect
Speaker 2: of it. And if I can't be there, at least
Speaker 2: I've provided that. So I think for me that's really
Speaker 2: important and legacy. You know, it doesn't come in the
Speaker 2: form of like, oh, I feel I need a million
Speaker 2: dollars worth of cover because I want a whole heap
Speaker 2: of this money to go to the Lost Dogs Home.
Speaker 2: It's actually I want to leave a legacy where my
Speaker 2: children and my family know that I looked after them
Speaker 2: even when I couldn't be present. And I think that
Speaker 2: that's a really cool part of the to me life
Speaker 2: insurance conversation.
Speaker 4: Yeah, And the other thing to note, you know, as
Speaker 4: you talked about you and Steve are contributing, you know,
Speaker 4: collectively financially to the household. But something I just want
Speaker 4: to call out is if you're not equally contributing financially
Speaker 4: to the household, doesn't mean there's no need for life insurance. Exactly.
Speaker 2: You brought this, We're screwed without it.
Speaker 4: We're increasing her life insurance at the moment because if
Speaker 4: I didn't have cage, like she went overseas for two
Speaker 4: and a half weeks last year and it was chaos.
Speaker 4: Me and the girls had a joke about all the
Speaker 4: dad fails I did the first day I left, you know,
Speaker 4: the lunch box at home for our youngest and so
Speaker 4: I've got a call from the school saying, hey, kids
Speaker 4: does no Yeah, Harbor's got no food, and I'm like, okay, cool,
Speaker 4: I better go and do that. Just the chaos that
Speaker 4: that was for two and a half weeks, and there
Speaker 4: was no emotional baggage, you know, I.
Speaker 2: Was, You're just happy she was.
Speaker 4: Having a good time. But if she passed away, like
Speaker 4: we would have those dad fails times a million. And
Speaker 4: so it's not just about oh, we're both financially contributing. Like,
Speaker 4: it doesn't matter about the financial contributions. Life insurance is
Speaker 4: incredibly important and if not more important for someone who is, know,
Speaker 4: for my case, looking after the girls full time. We're
Speaker 4: literally going through increasing Kate's cabar, and.
Speaker 2: For good reason, because she does six million things that
Speaker 2: you do not make. Friend and I used to have
Speaker 2: these conversations where couples would come to me and they
Speaker 2: came to me with the I guess aim of getting
Speaker 2: their husbands or the primary income earners income protection insurance enforced.
Speaker 2: And you'd go, all right, well that makes sense, let's
Speaker 2: have that conversation. And you'd kind of then turn your
Speaker 2: chair around and be like, and what about you? And
Speaker 2: they'd be like, oh, no, I don't work. It's all good,
Speaker 2: and I'd be like, sorry, I'm pretty sure. Don't mean
Speaker 2: to be rude. Person who's primary income earner, you're more
Speaker 2: expensive to replace than them, because like if the primary
Speaker 2: income earner, and please don't get me wrong, like this
Speaker 2: isn't a conversation about household chores and the division of
Speaker 2: labor and all of that. It's not actually about that.
Speaker 2: But if you're in a circumstance where you do have
Speaker 2: someone at home. They're the taxi driver, they're the chef,
Speaker 2: they are the housekeeper, they are the educator, they are
Speaker 2: the childcare they are they're literally everything under the sun.
Speaker 2: And for you to replace that person is I promise
Speaker 2: way more than usually what the primary bread winner's income is.
Speaker 2: And that's why I look at it and go TPD
Speaker 2: trauma insurance, life insurance that that person is really important. Obviously,
Speaker 2: if they don't have an income to protect, you're not
Speaker 2: going to be able to protect that. But ensuring them
Speaker 2: in every other way is so essential because it's going
Speaker 2: to keep your life on a pathway that you choose.
Speaker 2: If something that you choose not to happen.
Speaker 4: Happens, that's right. And for the main income or they've
Speaker 4: got income protection to carry a lot of the load
Speaker 4: for that loss of income. But if you're not working
Speaker 4: and you're not earning an income, you can't get income protection.
Speaker 4: So that's why these lumps some covers so live TVD trauma,
Speaker 4: they're so much more important for that non working partner
Speaker 4: because there's no income protection.
Speaker 2: Yeah, exactly. All right, let's talk about TPD insurance that
Speaker 2: is total and permanent disability. What is it, Phil? Why
Speaker 2: would I get it?
Speaker 4: So if you're totally and permanently disabled, So if you
Speaker 4: cannot work ever again because of anything health, mental health,
Speaker 4: you know, physical health, like any reason you cannot return
Speaker 4: to work, you will get paid a lumps So it's
Speaker 4: just a once off payment that you'll get paid. There
Speaker 4: are some TVD policies that are paid over six years,
Speaker 4: and they're becoming a bit more popular these days. Some
Speaker 4: super funds have that. I personally don't love it, but
Speaker 4: it's just a once off payment which is just a
Speaker 4: lump sum payment, and we normally pair that with a
Speaker 4: life insurance.
Speaker 2: That actually reminds me of the conversation I had last
Speaker 2: year on the podcast with my friend Rianne and Tracy
Speaker 2: And if you haven't listened to that. She has an Instagram,
Speaker 2: She is an influencer, she like is a coach, she
Speaker 2: like does a whole heap of inclusion modeling and also
Speaker 2: has her own rehab facility because Phil TLDR. She went
Speaker 2: overseas with her mum to Bali when she was much younger,
Speaker 2: I think she was twenty. She dove into a pool
Speaker 2: in Ballei brokenneck and she is now a wheelchair bound
Speaker 2: and unable to walk, unable to do all of those
Speaker 2: things that a twenty year old should have been able
Speaker 2: to do. And she had insurance, but she didn't have much.
Speaker 2: And she spoke about the ongoing cost of what her
Speaker 2: disapate costs her, and she's like, even if I had
Speaker 2: top level cover, like, my disability over my lifetime calculated
Speaker 2: out will cost me eleven million dollars because all the
Speaker 2: things that need to happen in and around like even
Speaker 2: her wheelchairs, and you know, accommodations that needed to be
Speaker 2: made to her home, and you know, doorways that need
Speaker 2: to be wide enough and ramps and all of those
Speaker 2: things that need to be taken into consideration. That's what
Speaker 2: you're kind of talking about when it comes to total
Speaker 2: and permanent disability, making sure that you've got the cash
Speaker 2: to make you comfortable as well as you know, pay
Speaker 2: for care and make sure that all of that is
Speaker 2: well and good. But to me, I just remember being
Speaker 2: like it what like she calculated out on the podcast,
Speaker 2: feel what it costs for her to go to the
Speaker 2: bathroom each year, Yes, you listen to it, and I
Speaker 2: just remember being like, what do you mean it costs
Speaker 2: more than eighty thousand dollars a year, and she's like, well,
Speaker 2: that's just what it costs in catheters and you know,
Speaker 2: support for me to actually just go to the bathroom
Speaker 2: and I just go, holy snapping ducks, Like that's so expensive.
Speaker 2: But these are things that if you've never been through it,
Speaker 2: you don't think about. Why would you think about that?
Speaker 4: Phil?
Speaker 2: So I think that this is where it's important to
Speaker 2: have something like TPD and to have that in force,
Speaker 2: because it's just going to help so much with those
Speaker 2: rehabilitation and living costs that are essential. Like you don't
Speaker 2: have a choice. If you're in a wheelchair, you're not
Speaker 2: going upstairs. Who's paying for that ramp? It's not someone's
Speaker 2: going to come around and build it because they're nice. Unfortunately,
Speaker 2: the last type of insurance we're going to talk about
Speaker 2: today is trauma insurance. And I do feel like this
Speaker 2: one sometimes just gets overlooked. Often people like, oh, it's
Speaker 2: just another insurance, feel like it's not that important. Why
Speaker 2: is it important? Why do I have so much of it?
Speaker 4: Trauma is for specific medical events, so it's got nothing
Speaker 4: to do with we you can work or not. It's
Speaker 4: got nothing to do with whether you pass away or not.
Speaker 4: It's specific medical events and they're all listed out in
Speaker 4: the contract. But the major ones are cancer that makes
Speaker 4: up majority of all claims. Is can My sister in
Speaker 4: law had bow cancer a few years ago, you know,
Speaker 4: one in eight people. And then when I went to
Speaker 4: the doctors, I saw the sign because you know, I
Speaker 4: had bow cancer in my family, and I saw one
Speaker 4: in eight people will have bow cancer in Australia. I'm like,
Speaker 4: that is insane. And so actually cancer is the major
Speaker 4: one paid out of this thing is like heart attack, strokes, MS.
Speaker 4: You know, there's a whole bunch of conditions that's listed
Speaker 4: on trauma or critical illness, and that for me is
Speaker 4: kind of the second most important, depending on life stage
Speaker 4: and everything. Life insurance is very important. Income protection is
Speaker 4: my number one. Trauma was kind of my number two
Speaker 4: because it is the most claimed on after income protection.
Speaker 4: And it's so important because, as I said, my good
Speaker 4: mate who had pancreated cancer, super healthy forty two years old,
Speaker 4: nothing was ever going to happen to him, and he
Speaker 4: had blood tests for months and months and months. He
Speaker 4: knew something was wrong, but it just couldn't work it out.
Speaker 4: What was the doctors like your hypochondriacing, how on.
Speaker 2: Top of it he was, and that then he still
Speaker 2: got the worst possible ality.
Speaker 4: And he found out stage four pancreatic cancer after spending
Speaker 4: nine months of blood tests, going, I know something's going on.
Speaker 4: So that for him, he was able to get paid
Speaker 4: out a trauma claim because he had a trauma insurance.
Speaker 4: We've got clients that I talked about with four months
Speaker 4: after the policy was inforced, found out she had breast cancer.
Speaker 4: There is not anyone in Australia who doesn't have an
Speaker 4: experience with cancer in their family or friends, and so
Speaker 4: we all have experiences with these medical events that will
Speaker 4: pay out on trauma. Trauma just can't be paid from
Speaker 4: by your super. So most people think I've got insurance
Speaker 4: sorted out. My super's got it covered for trauma. You
Speaker 4: super will never have it because it just can't.
Speaker 2: Everybody assumes that when you are getting your personal insurance
Speaker 2: has set up, you can hold them all within super,
Speaker 2: and that's just not the case. It's interesting as well
Speaker 2: because I feel like trauma sometimes with clients and I
Speaker 2: don't know if you found this, but I did. When
Speaker 2: I was an advisor, you'd sit down with clients, maybe
Speaker 2: you hadn't heard from them many year and you'd finally
Speaker 2: have your like and your catch up and you'd be like,
Speaker 2: how are you what's been going on? Like what's changed?
Speaker 2: And they go, oh, not much. They like, you know,
Speaker 2: we've moved or we've done this or that. Oh yeah,
Speaker 2: and you know Bill had a melanoma cut out and
Speaker 2: you go, wait what, Oh yeah, it's fine, like you know,
Speaker 2: they caught it. They did a little bit of this
Speaker 2: that the other major And I was like, you know,
Speaker 2: that's a trauma claim, right, like you can get paid
Speaker 2: for that, because often in the trauma space, when you
Speaker 2: get that policy, there's obviously categories of what type of
Speaker 2: trauma you experienced, and it was obviously a lower one.
Speaker 2: Bill's fine, don't worry, But I go, can you let
Speaker 2: me fill in the claim? Sign these forms here? Can
Speaker 2: I get permission to get all this information from your doctors?
Speaker 2: He's forty grand for you. Yeah, And they would be
Speaker 2: like wait what. I'd be like, well, that's the value
Speaker 2: of having twenty.
Speaker 4: Five percent of the trauma amount gets paid as a
Speaker 4: partial claim.
Speaker 2: And yeah, exactly where ma'am, Thank you, ma'am. It doesn't
Speaker 2: wipe out your insurance, you carry on paying your premium,
Speaker 2: and if something else happens down the track, you can
Speaker 2: claim again. And I just look at it and go,
Speaker 2: this is where it's so important to understand because I
Speaker 2: feel like at the moment, especially because I'm in my
Speaker 2: thirties now, my friends are starting to experience health events
Speaker 2: that you know, when I was in my early twenties,
Speaker 2: we're like, Bah, that'll never happen, and then you drink
Speaker 2: yourself into oblivion or don't wear sunscreen. And I think,
Speaker 2: especially being in Australia, making sure that you not only
Speaker 2: have the cover to make sure that you're okay, but
Speaker 2: you understand when you can claim, because I can almost
Speaker 2: guarantee there are so many trauma claims just floating around
Speaker 2: by people that have the trauma insurance that didn't know
Speaker 2: they could claim on it.
Speaker 4: Right, Yeah, owing our good friend and he won't mind
Speaker 4: me saying this, but Glenn.
Speaker 2: James Meloni yeah posted on Insta about.
Speaker 4: It and his trauma payment got paid out and happy
Speaker 4: to account.
Speaker 2: I remember him joking about that actually, because like obviously
Speaker 2: we as I guess the background group of money and
Speaker 2: content creators talk quite often. He's like, yeah, yeah, I
Speaker 2: don't worry. I'm getting a cut out and I'll get
Speaker 2: paid soon. I was like, this is not how you
Speaker 2: should see it, but like in reality, like make hay
Speaker 2: while the sun's shining right, like you're going through this
Speaker 2: terrible experience, like at least you're getting something out of it.
Speaker 4: One of our team members as well, actually had a
Speaker 4: cancer scare this year. It was interesting situation, but like
Speaker 4: a cancer scare, had operations and she's okay now, she's
Speaker 4: fully clear. Had she not worked in insurance, she probably
Speaker 4: wouldn't have assumed that she could get paid out of
Speaker 4: claim because it wasn't full bown cancer. She wasn't going
Speaker 4: through chemo or anything. It was just a bit of
Speaker 4: a scare, you know, got stuff cut out and she's
Speaker 4: all good now. Had she not been in the industry,
Speaker 4: and also had I not caught up the insurance company
Speaker 4: and said, hey, you better pay out this claim, excuse
Speaker 4: me strong on them a little bit.
Speaker 2: I feel like when people are in our wheelhouse, whether
Speaker 2: they are you know, our staff or our clients, you're like,
Speaker 2: hold on, no, no, no, I've got some sway ye. I
Speaker 2: feel like it's like a financial advisor power trip. We're like,
Speaker 2: we don't have a lot of power, but like when
Speaker 2: we do, yeah.
Speaker 4: Give me a stifferent power and I'll use it. And
Speaker 4: you know, saying with our friend with a terminal illness claim,
Speaker 4: it's he's in the industry, so a lot of people
Speaker 4: know him. So I'm like picking up the phone with
Speaker 4: anyone who pick up the phone and say, get this
Speaker 4: paid out as soon as possible, because you know who
Speaker 4: it's going to, and you know their family, you know
Speaker 4: their situation, So get this paid So you know there
Speaker 4: are sometimes you've got to got to be a little below. Yeah,
Speaker 4: a little bit. But we got paid out a full traumacclaim.
Speaker 4: And for her it was incredible, like she's cleared off
Speaker 4: her mortgage.
Speaker 2: Now, oh my gosh.
Speaker 4: And almost better than that, she doesn't need to pay
Speaker 4: her trauma premiums anymore because they were crossing an armor
Speaker 4: of the league for her because she had Smoker's raids
Speaker 4: and everything. So she's cleared off her mortgage and unfortunately
Speaker 4: for me in the business, she's gone, well, I don't
Speaker 4: have a mortgage. I'm going to go travel around Australia
Speaker 4: for six months. So now you lost a team member.
Speaker 2: I was like, that's what you get for looking after Phil.
Speaker 4: I was like, I mean, it's incredible because now they're
Speaker 4: living their best life. And her husband, who's worked every day,
Speaker 4: he's never taken a break from when he was seventeen
Speaker 4: years old. He's got six months of long servicely he's
Speaker 4: taking that time off to travel around Australia and they're
Speaker 4: going to live their best life. And yes, that money
Speaker 4: wasn't essential because she didn't go through chemos, she didn't
Speaker 4: go through treatment for it, but she met the criteria
Speaker 4: and it's absolutely changed your life.
Speaker 2: I feel like it's a very funny I guess paradigm
Speaker 2: to go. Arguably, as much as that was literally traumatic,
Speaker 2: also one of the best things that could have happened,
Speaker 2: because it's literally shifted how her life works and what
Speaker 2: her lifestyle looks like. And that's you know, never a
Speaker 2: selling point for insurance, but it's so nice to know
Speaker 2: that if you go through something traumatic and so traumatic
Speaker 2: at that you're not going to be in a worse
Speaker 2: off position, because a lot of the time, if you
Speaker 2: go through this and you don't have that support, you're
Speaker 2: out because you know you might have exhausted your sick
Speaker 2: leave and your boss might not be Phil Thompson, So
Speaker 2: he's probably not as kind. You know, you would have
Speaker 2: had to take a whole heap of unpaid leave. You're
Speaker 2: taking a step back in your career, like everything's just
Speaker 2: a bit up and arms you're probably even more stressed.
Speaker 2: Like I am going to start looking into doing research
Speaker 2: around the stress levels of people experiencing significant trauma like
Speaker 2: medical trauma, and whether they have insurance or not, because
Speaker 2: I could almost guarantee that if you don't have it
Speaker 2: and you're going through that circumstance, the outcomes would be
Speaker 2: worse because you are literally stressing and increasing your quartisol
Speaker 2: levels and like having a really awful time as opposed
Speaker 2: to when you feel supported and you know, you know
Speaker 2: what all of that is covered for. Right now, I
Speaker 2: just need to focus on getting better. Yes, I think
Speaker 2: that there's a lot to it. But this conversation I
Speaker 2: think has been really helpful. I have adored it. But
Speaker 2: what are next steps for people who have listened to
Speaker 2: this and they're like, well, I don't have live insurance,
Speaker 2: I haven't set this up, I don't even know what
Speaker 2: it is. What do we do and who do we
Speaker 2: go and talk to?
Speaker 1: So les me?
Speaker 4: Well, yes, me? The short answer, I go to sky
Speaker 4: dot com dot U, but you know, go check out
Speaker 4: your super fun see what you've got there, because that's
Speaker 4: not junk covered. Don't ever cancel the cancel at no
Speaker 4: before going and speaking to a financial advisor, and then
Speaker 4: speak to a financial advisor about it. The reason you
Speaker 4: speak to a financial advisor is because going direct, there's
Speaker 4: only two insurance companies who will sell good products direct
Speaker 4: to the consumer. Now, why don't all insurance companies go direct?
Speaker 4: It's exactly like Cabri chocolate. You know, I don't go
Speaker 4: to Tazzy and go to the Cabri factor and buy
Speaker 4: my blocker chocolate. I go to Coals. It's distributed through
Speaker 4: a third party. Cabrit make more money, Coals make money,
Speaker 4: and it's more convenient and better for me because it's
Speaker 4: a cheaper product. I don't need to get plan tickets.
Speaker 4: So that's actually why insurance companies don't sell direct, or
Speaker 4: very few do, so it's better to go through a
Speaker 4: financial advisor. Also, financial advisors can structure it in a
Speaker 4: much more tax effective way. And tax effective sounds sexy,
Speaker 4: but it's really just simple. Financial advisors can set up
Speaker 4: your insurance so it's paid from your super fund, but
Speaker 4: not set up by your super fun so you can
Speaker 4: move super in the future, but your super fund can
Speaker 4: still pay the premiums and it's not locked to that.
Speaker 2: That's what I do feel.
Speaker 4: You're a smart cookie.
Speaker 2: I'm not my financial advice.
Speaker 4: So that's why financial advisor is the best way to
Speaker 4: get this done because they can structure it that way.
Speaker 4: And there are a whole bunch of other sexy features
Speaker 4: and benefits and I won't go into too much, but
Speaker 4: go and speak to a financial advisor after having a
Speaker 4: look at your own superfund insurance. Most superfund insurance you'll
Speaker 4: have maximum of two hundred and fifty thousand of life intimidy.
Speaker 4: Now for most Australians that is completely under insured. So
Speaker 4: you know, the Superannuation Regulator came out and said super
Speaker 4: funds are doing an inadequate job when it comes to insurance.
Speaker 4: And when you look at the biggest super funds in Australia,
Speaker 4: they give incredibly low levels of cover because it impacts
Speaker 4: the level of funds that people have invested that they're
Speaker 4: charging fees on. So there is a potential conflict between
Speaker 4: the super funds and the insurance premiums. So go and
Speaker 4: speak to a financial advisor, and that will help communicate
Speaker 4: what you need. If the advisor isn't asking you about
Speaker 4: your medical history before they recommend an insurance provider, for me,
Speaker 4: that's a red flag.
Speaker 2: That's a massive red flag because.
Speaker 4: The differences between insurers is huge based on your personal
Speaker 4: medical history, and it should be chosen based on your
Speaker 4: own personal medical history. So that's my recommendation. Find out
Speaker 4: what you got through super, then go and speak to
Speaker 4: a financial advisor and making sure that they're having a
Speaker 4: look through your medical history.
Speaker 2: I think that's also an important point that you bring up,
Speaker 2: actually about the medical history, because I think sometimes you
Speaker 2: go hi, giene factor, Gray, oh chat fellerg at my
Speaker 2: insurance is sorted. But I used to say when I
Speaker 2: was a financial advisor that I was always in the
Speaker 2: most privileged position because you get to know your clients
Speaker 2: deeper than anybody else. Right, Like you go to your GP,
Speaker 2: they know all your medical history, but they don't know
Speaker 2: your goals, your values, what's going on When you are
Speaker 2: a financial advisor, you're in this circumstance where you're talking
Speaker 2: about these deep personal things with clients like hey, cool, well,
Speaker 2: how do you feel about your wife, because you know,
Speaker 2: if I'm setting up this insurance and you actually want
Speaker 2: to circumvent your wife and have it go straight to
Speaker 2: your kids, if something happens to you, we need to
Speaker 2: have that confidential conversation. You're going to have to tell
Speaker 2: me about your personal medical history. I know it's a
Speaker 2: bit uncomfortable, but don't worry. I'm an advisor. I literally
Speaker 2: talk about this stuff every single day with you, with insurers,
Speaker 2: with my team like this stuff. I'm not judging you.
Speaker 2: I don't care what you've done, but you need to
Speaker 2: disclose this information. And I always found myself in this
Speaker 2: position where I'd be like far out, like I have
Speaker 2: such a deep knowledge of clients. But I think you
Speaker 2: also need to expect that too. As a client, you're
Speaker 2: going to be asked some questions like why are they
Speaker 2: asking me that? In a fact find But the reality
Speaker 2: is so that you can be in the best possible
Speaker 2: position because there's nothing worse. And thankfully it's never happened
Speaker 2: in my business, but I know it's happened to other
Speaker 2: advisors where they've gone to claim and then all of
Speaker 2: a sudden, the claim's going to be denied because the
Speaker 2: patient or the client didn't disclose something really important because
Speaker 2: they're like, oh, I didn't really want to talk to
Speaker 2: my advisor about it. It's all out on the table,
Speaker 2: And to be honest, we don't care what you do,
Speaker 2: how you do it, where you do it, or what
Speaker 2: that looks like. We just need to know to put
Speaker 2: you in the best possible position and then down in
Speaker 2: the future, we have this deep relationship with you. If
Speaker 2: something happens, we're the ones that have got your back
Speaker 2: to make sure that that happens. So you're not doing
Speaker 2: the paperwork, you're not following up when you actually need
Speaker 2: to be focusing on getting better and dealing with you
Speaker 2: and your family. So I think it's yeah to me,
Speaker 2: I kind of missed financial advice.
Speaker 4: You can get back and be an insurance advisor.
Speaker 2: No, it's all right. I've got a job so far,
Speaker 2: so good. Like I've just got this little we're doing
Speaker 2: all right. I'll just flick all my clients to you.
Speaker 1: Still.
Speaker 4: I went to a cafe yesterday with Gabby and we're
Speaker 4: at the cafe.
Speaker 2: Hanging out with my team during work hours.
Speaker 4: We went to a cafe where we first caught up
Speaker 4: for coffee. Really, and you show me She's on the
Speaker 4: Money Facebook group and I had three thousand members. Cafe
Speaker 4: was that it was pinky and my mind was blown
Speaker 4: when you had three thousand members in the face and
Speaker 4: I was like, it's just little.
Speaker 2: I don't know what to do with it. So you're
Speaker 2: doing okay, We're all right, all right, Well, it has
Speaker 2: been a pleasure having you on to feel obviously, if
Speaker 2: anyone is interested, visits Skye dot com dot au sky
Speaker 2: is spelled s k ye, and I will obviously make
Speaker 2: sure that all of the information is in the show notes.
Speaker 2: You don't have to remember that at all. Thank you
Speaker 2: so much for coming. We love you and I will
Speaker 2: see you for a Friday episode on Friday by The
Speaker 2: advice shared on She's on the Money is general in
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