Insurance Advisory

Overview

Personal risk insurance is structurally one of the most conflicted areas of financial advice in Australia. Most advisers who recommend insurance receive upfront commissions of up to 60% of the first year's premium, followed by ongoing trail commissions. This creates a straightforward financial incentive to recommend higher-premium policies regardless of whether they are appropriate for the client. Peter White Financial Planning rebates any commissions received from insurance providers directly to the client. The advice is based on the coverage you need, not the coverage that generates the highest commission.

Details

Peter advises on personal risk insurance from Level 57, 25 Martin Place, Sydney CBD, drawing on 25 years of financial services experience. Insurance advice is provided as part of an integrated financial plan, not as a standalone recommendation, which means the level and structure of cover is assessed in the context of the client's superannuation, investments, income, and family obligations.

Additional Information

The most valuable financial asset for most working Australians is their capacity to earn an income. A serious illness, a disabling injury, or an untimely death can remove that capacity entirely. The appropriate level and type of cover varies considerably depending on income, debts, dependants, existing assets, and how much risk can be absorbed without insurance.

More About This Service

Life insurance pays a lump sum to nominated beneficiaries on the death of the insured. Total and Permanent Disability insurance pays a lump sum if the insured becomes permanently unable to work. It is distinct from income protection and is often held inside superannuation, where the policy definitions and tax treatment of any claim differ from retail alternatives held outside super.

Further Details

Income protection insurance replaces a proportion of the insured's income, typically up to 70%, during a period of temporary disability. The key variables are the waiting period before payments commence, the benefit period for which payments continue, and whether the policy definition is based on the inability to perform the insured's own occupation or any occupation.

Overview

Trauma insurance pays a lump sum on diagnosis of a specified medical condition including cancer, heart attack, stroke, and coronary bypass surgery. It provides immediate capital for treatment and rehabilitation rather than an ongoing income replacement. A significant proportion of the insurance held by Australians sits inside their superannuation fund under default group policies. Peter reviews whether existing cover within super is adequate, assesses the policy definitions against retail alternatives, and advises on the structural implications of holding cover inside versus outside superannuation.

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Frequently Asked Questions

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The appropriate sum insured for life insurance is calculated by adding outstanding debts, the present value of the income your family would need to replace over an appropriate period, and any specific capital needs such as education funding, then subtracting existing assets. Peter White calculates this figure based on your actual financial position rather than applying a multiple-of-income rule of thumb.

Income protection provides a monthly benefit, typically 70% of pre-disability income, during a period when you are temporarily unable to work due to illness or injury. Total and Permanent Disability insurance provides a lump sum payment if you are permanently unable to return to work. Income protection addresses temporary incapacity; TPD addresses permanent incapacity. Most clients benefit from holding both, and the appropriate level of each depends on their existing assets, income, and financial obligations.

Default group insurance inside superannuation is underwritten on a no-advice basis and is designed to be broadly appropriate for a large membership rather than specifically appropriate for any individual. Cover levels are often based on a multiple of the account balance or a fixed default sum, which may bear no relationship to actual income, debts, or family obligations. Policy definitions in group insurance can also be more restrictive than retail alternatives. Peter White reviews existing cover and identifies gaps.

Trauma insurance pays a lump sum on diagnosis of a specified critical illness, regardless of whether you are able to return to work. Income protection pays a monthly benefit only during the period of disability. Trauma insurance addresses the immediate financial shock of a serious diagnosis, covering costs that income protection does not, including private treatment, specialist fees, and home modifications. The two products are complementary and address different financial risks.