There are many different types of insurance available in Australia. Some people might only be familiar with the most common types, such as home and contents insurance, car insurance, or travel insurance. However, many other types of insurance can be beneficial for Australians. In this article, we will discuss some of the different types of insurance available in Australia, and provide insights into why you might want to consider engaging them.
The most common types of insurance in Australia are:
#1. Home and Contents Insurance
This type of insurance covers your home and belongings if they are damaged or destroyed. It can also provide cover for temporary accommodation costs if your home is uninhabitable due to an insured event.
Home insurance protects your home from:
- Protects your home from damage or theft
- Can also cover your belongings inside the home
- Rates vary depending on where you live and what type of coverage you choose
#2. Car Insurance
This type of insurance covers your vehicle if it is damaged or stolen. It can also provide cover for third-party property damage and personal injury if you are involved in an accident.
In Australia, there are many benefits to having insurance, they include peace of mind, protection from financial loss, and more. The peace of mind that comes with car insurance assures you that if you are involved in an accident or your car gets stolen, your insurance will cover the cost of repairs or replacement thereby lifting the financial burden off you.
Car insurance also protects from legal liability. If you are sued for damages after an accident, your insurance will cover the cost of your defence.
#3. Life Insurance
No one likes to think about their mortality, but life insurance is an important consideration for anyone with dependents. In the event of your death life insurance can be used to cover funeral costs, and outstanding debts, or provide financial security for your loved ones.
In Australia, there are a number of different types of life insurance available, so it’s important to shop around and compare policies to find the right one for your needs. While life insurance is not compulsory, it can be a wise investment, especially if you have dependents who rely on your income. So, if you’re thinking about taking out life insurance, be sure to research the different options available to find the best policy for you and your family.
#4. Travel Insurance
Travel insurance provides cover for medical expenses, lost or stolen luggage, flight cancellations, and other travel-related disruptions, either within one’s own country or internationally.
Travel insurance can be bought as a standalone product or as an addition to an existing health insurance policy. In Australia, there are a number of companies that offer travel insurance, and it is important to compare policies before purchasing one.
Consider the cost of the premium, the excess, the level of cover and the exclusions. It is also important to read the policy documents carefully to make sure that you understand what is and is not covered. By taking out travel insurance, you can protect yourself from financial losses incurred as a result of unexpected events while on holiday.
#5. Pet insurance
This type of insurance covers your pet, your pet is insured against injury or illness. It can also provide cover for third-party property damage if your pet causes an accident.
In Australia, there is a huge range of pet insurance policies available to help you cover the cost of veterinary care for your beloved animal companions. While the initial outlay for insurance may seem like an unnecessary expense, the peace of mind it can provide is invaluable. Not to mention, the financial protection it offers in the event of an unexpected accident or illness. Veterinary bills can be very expensive and often come at a time when we are least able to afford them.
Pet insurance can help take the financial stress out of vet visits, allowing you to focus on what’s important – getting your furry friend the treatment they need. There are a variety of factors to consider when choosing pet insurance, so it’s important to do your research and select a policy that best suits your needs. However, if you’re looking for peace of mind and financial protection, pet insurance is worth considering.
The different types of insurance we’ve discussed can be vital in protecting you and your loved ones from a variety of unfortunate events. No one wants to think about the worst-case scenario, but being prepared for them is important. Taking out an insurance policy gives you peace of mind and allows you to live your life without constantly worrying about what could happen. Have you considered taking out any of these policies? If not, now might be the time to do some research and find the right cover for you.
Bonds are a popular investment option for many Australians, offering a relatively low-risk way to earn income and potentially grow your wealth. Here is a brief overview of bonds and how you can invest in them as an Australian investor.
What are bonds?
Bonds are a type of debt security that is issued by governments, corporations, and other organizations. When you invest in a bond, you are essentially lending money to the issuer in exchange for regular interest payments and the return of your principal investment at a specified date in the future.
How do bonds work?
When an issuer sells a bond, they specify the terms of the bond, including the interest rate, the length of the loan, and the date on which the principal will be repaid. As an investor, you can choose to invest in bonds that offer a fixed or variable interest rate, depending on your preferences and risk tolerance.
If you invest in a bond with a fixed interest rate, you will receive regular interest payments at the same rate throughout the life of the bond. If you invest in a bond with a variable interest rate, your interest payments will fluctuate based on changes in the market interest rate.
At the end of the bond’s term, the issuer will repay the principal amount of the loan to you, unless the issuer defaults on the loan. In that case, you may lose some or all of your investment.
How can Australians invest in bonds?
There are several ways that Australians can invest in bonds:
- Directly through the bond market. You can buy and sell bonds directly through the bond market, either through a broker or online trading platform.
- Through a managed fund. You can invest in bonds through a managed fund, which pools the money of many investors and invests in a diversified portfolio of bonds. This can be a convenient and low-cost way to invest in bonds, but it also means that you will not have as much control over your investments.
- Through a term deposit. Term deposits are a type of fixed-income investment offered by banks and other financial institutions. When you invest in a term deposit, you agree to lend money to the institution for a fixed period of time, in exchange for a fixed interest rate.
Overall, bonds can be a useful addition to your investment portfolio, providing a source of regular income and potentially helping to diversify your investments. As with any investment, it’s important to carefully research and evaluate your options before investing in bonds. You should also consult with a financial advisor if you have questions or need help with your investment decisions.
The competition for hiring the best employees continues to get tighter, which is why businesses are providing more benefits to candidates aside from good salary rates. These additional employee packages may fall under what’s called fringe benefits which are subject to a fringe benefits tax.
What is a Fringe Benefit?
A fringe benefit is a non-cash benefit that a business provides to its employees outside salary and wages. Employees utilising company assets for personal use is an example of a fringe benefit.
Companies often provide fringe benefits to attract top employees who are looking for more work advantages aside from a good salary. A private car, low-interest loans, discounted goods, and reimbursement on private expenses like gym memberships, school tuition fees, or entertainment costs are some of the most commonly awarded fringe benefits that companies offer.
The definition of a fringe benefit according to the Fringe Benefits Tax Assessment Act 1986 (FBTAA) is very broad that it can include almost anything like a car, a computer, a desk, a chair, a flowerpot, or a toilet, so long as they’re not in the form of cash. These can be awarded to employees, including a company director, a trust beneficiary who works for a company, or a current, former, or future employee, as stated in the FBTAA’s definition.
What is a Fringe Benefits Tax?
A fringe benefits tax (FBT) is a form of tax the employer pays on non-cash benefits given to employees. The amount taxed is based on the value of the provided benefit and is separately paid from income tax.
According to the FBTAA, a benefit is still subject to FBT so long as one of the reasons it’s given is related to employment. Third-party arrangements like novated car leases are subject to FBT.
Since there are more items covered by FBT, it’s faster to take note of the exemptions to the rule. According to the ATO, the following items are not counted under fringe benefits:
- Salary and wages
- Benefits obtained from share acquisition programs
- Employer contributions to super funds
- Payments for contract termination
- Compensation for personal injury
- Excessive remuneration and deemed dividends
- Benefits given to contractors and volunteers
Shareholding can be difficult to classify whether it’s subject to FBT or not, especially in a family business where employees are relatives and are not within arm’s length. To avoid putting the benefit under the FBT radar, it’s best not to associate the benefit in any way with employment terms.
Calculating and Filing for FBT
For employers, calculating the FBT depends on any of the following categories the benefit belongs to:
- Board fringe benefits
- Car fringe benefits
- Car parking fringe benefits
- Debt waiver fringe benefits
- Entertainment-related fringe benefits
- Expense payment fringe benefits
- Housing fringe benefits
- Living away from home allowance fringe benefits
- Loan fringe benefits
- Property fringe benefits
- Residual fringe benefits
Work-related items such as computer software, protective clothing, portable electronic devices, and tools of the trade are exempted from FBT so long as they comply with the limitations set by the ATO.
In calculating FBT, there are two gross-up rates to use depending on eligibility for GST credits:
- Higher gross-up rate (Type 1)
Used when the company or third-party benefit providers are eligible for GST credits on fringe benefits.
- Lower gross-up rate (Type 2)
When the fringe benefits provided aren’t entitled to GST credits.
The tax payable is computed using the taxable value of the benefit multiplied by either of the two gross-up rates. Employers can lessen their FBT liability through cash bonuses, employee contributions, and tax-deductible benefits.
Employers must register for FBT if they provide fringe benefits to employees. This can be done online, through phone, with the help of a tax agent, or by directly filing the FBT return to designated government offices.
A report from the Australian Securities and Investments Commission (ASIC) says that 32% of Self-managed Superannuation Fund (SMSF) members found that setting up their SMSF is costlier than expected. Also, 38% of SMSF owners said that it was time-consuming to set up than anticipated.
But because of the significant benefits of SMSF, like flexibility and tax strategies, many people are taking the task of growing their money into their hands.
If you want to handle your fund, you must understand the work and costs associated with managing an SMSF. There are four major areas where fees go:
1) Initial advice fee
Contacting a Financial Planner or an SMSF Specialist Advisor is recommended in setting up your SMSF. You can also consult these specialists for advice regarding the management of your super, insurance, investment, or debt.
The average rate of specialists is around $2,400. For easier problems, fees can go as low as $1,870. However, complex situations will also call for longer resolutions and costlier fees which can go as high as $8,800.
2) Establishment costs
Once-off setup fees will depend on whether you want to create an individual trustee or a corporate trustee. It’s recommended to go for a sole purpose corporate trustee as it’s more efficient and has greater asset protection.
A corporate trustee will cost around $1,000 to $1,500, inclusive of the $450 ASIC Incorporation Fee. On the other hand, an individual trustee will cost around $500 to set up, and that includes the Trust Deed and all other documentation.
To establish the fund and legalize it, it must be registered as a Complying Super Fund. The fund should also be applied for an ABN and a TFN.
A Bare Trust and a Trustee company are both needed when borrowing property through an SMSF. For corporate trustees, the cost of the process will range from $1,400 to $2,000, inclusive of the ASIC Incorporation Fee. There’s no need to apply for a TFN and ABN for a Bare Trust.
3) Ongoing Administration Cost
The cost will depend on the size and complexity of your fund. Basically, you’ll be paying 2 types of fees. The first is the Account Keeping Fee which deals with the management of your tax return. The other is the Audit Fee which will be used to annually audit your super since you’re the trustee of the fund.
For simple funds, the average Ongoing Administration Cost will be around $2,000 per year, while complex ones may cost as much as $5,000. Good thing that online providers are now offering competitive rates of $80 to $180 per month, and already cover both Account Keeping and Audit fees. Make sure you thoroughly research the background of these online service providers to guarantee their capability of handling your account.
4) Ongoing Strategy Advice
Enlisting the professional expertise of accountants and financial advisors is highly recommended if you want to grow your SMSF. Of course, these services come at a cost and will vary depending on the provider, as well as the size and complexity of your fund.
Running an SMSF can be costly and time-consuming. Unless you have a large balance to manage, it’s better to go with ordinary super funds. Even if you manage to seek help from financial advisors, you’ll remain fully responsible with whatever happens to the fund.
Still, it’s better to have the guidance of experts in the field. There are numerous firms that offer advice and education on investments that will help you grow the fund. You just have to shop around and find one that suits your budget and needs.
Are you looking to invest in a company with solid financials? Something that has been gaining momentum since it started and has still room for growth in years to come. It’s possible that one of your candidates is Berkshire Hathaway – Warren Buffet’s famous baby.
Read on to know more about this company and how you can participate and ride its growing stock price.
Why Berkshire Hathaway?
Berkshire Hathaway is a gigantic holding company that has shares in diverse industries. Just last 2017, the company’s market capitalization grew to $448 billion, making it one of the biggest publicly listed companies in the world, along with the likes of Microsoft, Apple, and Alphabet.
Its founder, Warren Buffet, is famous for his ability to multiply his company’s revenues through value investing. His skill in stock picking and choosing a candidate that will become incredibly profitable in the long run is legendary enough to make him one of the richest persons in the world.
Some of the subsidiaries of his company include Dairy Queen, Kraft Foods Inc., and Geico. They also have stakes in Apple, Wells Fargo & Co., Verizon Communications Inc., Procter & Gamble Co., and General Motors Company.
Investing in Berkshire Hathaway
Unfortunately, Australians can’t participate directly in trading Berkshire Hathaway shares. The company isn’t listed on the Australian Stock Exchange (ASX).
There are many local companies that have businesses similar to Berkshire Hathaway. Although their performance may not be anywhere near Berkshire’s, the strategy involved in growing the business is somewhat the same.
Washington H. Soul Pattinson and Co. Ltd practice a strategy similar to Berkshire in looking for businesses to invest in. The company currently has a market capitalization amounting to AU$ 3.5 billion, thanks to its diversified portfolio delving into various industries. You can participate in trading their stock in the ASX by looking for their ticker named SOL.
But if you really want to get involved with Berkshire Hathaway, there are other ways to do this. You can open an account with trading platforms that allow you to participate in the international bourse.
The ASX also has a listed investment company (LIC) which has the majority of its assets placed on Berkshire Hathaway. The LIC we’re talking about is Global Masters Fund Limited.
Global Masters Fund Limited
Global Masters Fund Limited (GFL) was founded in 2004 in New South Wales. The company became publicly listed a year after.
Although GFL is a separate entity from EC. Pohl & Co., the former is a vital part of the strategy of the latter to give them better exposure to international markets, especially to publicly listed companies in the US and UK.
The company has two major investments in their portfolio. One is Berkshire Hathaway which composes the bulk of their selection. Their other offshore investment is on Athelney Trust PLC which is a company listed on the UK stock market.
GFL’s goal is to achieve long-term growth and create shareholder wealth by investing in companies listed internationally. For now, they’re focused on Berkshire and Athelney. But as their portfolio expands, it’s possible they’ll tap into other markets too in the near future.
The company does not pay dividends, though, since the majority of their shares is with Berkshire Hathaway which is known for not giving out dividends.
As of this writing, GFL is trading at AU$ 2.30 per share. It’s a lot cheaper compared to the actual price of Berkshire Hathaway shares. Maybe you can invest in this LIC and see if it will soar along Berkshire as the company reaches new highs.
In this article I write about what to do if your property is facing compulsory acquisition. Is it a win fall or does it mean disaster. It is clear though from researching the topic and interviewing people that the most important thing to do is to get the appropriate legal advice to ensure that you are maximising your chances of the best outcome possible.
It can be a stressful time if the Government wants to sell your house and knock it down to build a piece of infrastructure, so knowing your rights and understanding the process can go a long way to help relieve the pressure.
With so many infrastructure projects occurring in Sydney, Melbourne and Brisbane, thousands of people are affected by compulsory acquisition (and it should be noted that rules are state based and differ), so the article was well received and I received positive feedback from people it assisted.
To read the whole article, please click on the link below:
Despite its popularity, many people still do not know exactly what crowdfunding is. So what is it? Well, crowdfunding is a phenomenon that takes up the concept “the wisdom of the crowd” in which the public gets to consolidate in order to validate an idea.
Many entrepreneurs prefer crowdfunding when financing their business ideas or projects given the amount of money they can raise. In addition, they get a simple yet comprehensive platform where they can pitch their business ideas to potential investors without going into financial troubles.
Below are different types of crowdfunding:
- Donation: This sees the public donate or contribute funds for a community or charitable project.
- Reward: The public pledging money to a company with an aim of reaping the benefits of the company’s success.
- Equity: This sees companies that want to raise money issuing out equities to the public. By taking up these equities, they become shareholders. Entrepreneurs tend to take up this type of crowdfunding if they plan on expanding their business or are at an initial stage for start-ups.
- Debt (Peer-To-Peer lending): This sees the public lend money to individual parties or businesses which they later repay with interest.
Crowdfunding works in two ways. One, it works based on rewards. This allows the public to contribute their funds to a product either by a business or an individual with the promise of receiving the final product once the product is fully developed.
The other one sees the public raises funds for a company with the promise of having the slice of the company once it becomes successful. In exchange of their funds, the company or the individual given the money tend to give the public equities thus making them shareholders of the company. In Australia, only those are allowed to participate in this type of crowdfunding who earn around $250,000 or have assets that total up to $2.5 million.
There are several misconceptions or myths related to the crowdfunding, for example, many people believe that it does not require hard work. In fact, many believe that you can just start up a project, sit back and relax while the money rolls in. This is far from the reality.
For a crowdfunding project to be successful there has to be lot of work put into it. Another misconception surrounding crowdfunding is that it is only useful for start-ups or small businesses. Although it helps a majority of start-ups, established companies can also take advantage of it when they want to launch various products or even expand to other states or countries.
There are three key points one should keep in mind when it comes to get crowdfunding from investors. These are:
- Crowdfunding should help connect to a campaign’s greater purpose
- Crowdfunding should help connect to a campaign’s physical aspects
- Crowdfunding should help capture the campaign’s creativity
Lastly, it is important to make sure that every campaign has a powerful reason behind it. Most importantly, it has to have a reward aspect for the public for them to participate.
There has been a lot of media attention this week on the validity and strength of Comminsure life insurance policies with several case studies of people who have been declined claims based on what would appear to be valid claims on the surface.
It is concerning that people may be paying for life insurance policies that may not provide the coverage that they expected at claim time.
Whilst it may seem simple to select a life insurer to cover heart attack (via a critical illness policy), each insurer has different definitions for the events and conditions they cover under the category of heart attack.
To demonstrate this point, below we have provided the policy extracts from 5 major insurance companies on their coverage of heart attack including Comminsure. As you can see, each has different methods to assess heart attack claims.
If you would like a free review of your life insurance policy, please contact us using the contact form on the right hand side, call us on 1300 88 18 18 or e-mail at email@example.com
Please note: This information may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of this information having regard to your own objectives, financial situation and needs before acting on it. Where the information relates to a particular financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product.
Comminsure Protection Trauma Plus - Policy Extract
Heart attack of specified severity: The death of part of the heart muscle (myocardium) as a result of inadequate blood supply. The diagnosis must be based on either: – the following medical evidence: * elevation of cardiac enzyme CK-MB or * elevation in levels of Troponin I greater than 2.0 mcg/L or Troponin T greater than 0.6 mcg/L or their equivalent and * confirmatory new electrocardiogram (ECG) changes or * medical evidence satisfactory to us that the heart attack reduced the Left Ventricular Ejection Fraction to below 50% when measured at least six weeks after the heart attack or – any other medical evidence satisfactory to us which demonstrates that myocardial damage has occurred to at least the same degree of severity as would be evidenced by the medical evidence required under the first bullet point.
MLC Insurance Critical Illness Plus - Policy Extract
Heart Attack: (Myocardial Infarction) means the death of part of the heart muscle because of inadequate blood supply, confirmed by a Cardiologist and evidenced by:
typical rise and/or fall of cardiac biomarkers with at least one value above the 99th percentile of the upper reference range together with either: • new serial ECG changes showing the development of any one of the following: – ST elevation – left bundle branch block (LBBB), or – pathological Q waves, or • imaging evidence of new and irreversible: – loss of viable myocardium, or – regional wall motion abnormality. If the clinical pathway and disease management on hospital discharge for any medical event or investigation is not consistent with an acute myocardial infarction, then a claim is not payable under this policy. Myocardial infarctions arising from elective percutaneous procedures are excluded. If the above tests are inconclusive or superseded by technological advances, we’ll consider other appropriate and medically recognised tests.
TAL Accelerated Protection Critical Illness Premier - Policy Extract
Heart Attack (myocardial infarction) means the death of a portion of heart muscle as a result of inadequate blood supply to the relevant area. The basis of diagnosis will be: – confirmatory new electrocardiogram (ECG) changes; and – a diagnostic rise and fall (other than as a result of cardiac or coronary intervention) in either Troponin I in excess of 2.0ug/L or Troponin T in excess of 0.6ug/L or cardiac enzyme CK-MB.
If the above criteria are not met, We will pay a claim based on satisfactory evidence that the Life Insured has unequivocally been diagnosed as having suffered a myocardial infarction resulting in: – a permanent reduction in the Left Ventricular Ejection Fraction to less than 50%, measured three months or more after the event; or – new pathological Q waves. At TAL’s discretion, We will also consider any other medical test result provided by a cardiologist that unequivocally diagnoses myocardial infarction of the degree of severity or greater as documented above. Minor Heart Attack means the death of a portion of heart muscle as a result of inadequate blood supply to the relevant area. The basis of the diagnosis will be: – a confirmatory new electrocardiogram (ECG) changes; or – a diagnostic rise and/or fall of cardiac biomarkers with at least one reading above the 99th percentile of the upper reference limit. At our discretion, we will also consider any other medical test result provided by a cardiologist that unequivocally diagnoses myocardial infarction of the degree of severity documented above. If the clinical diagnosis and disease management on hospital discharge for any medical event or investigation is not consistent with an acute myocardial infarction as confirmed by a consultant cardiologist, then a claim is not payable under this policy. Myocardial infarctions arising from percutaneous procedures are excluded. In the case of Minor Heart Attack, the amount to be paid is reduced to 25% of the Benefit Amount to a maximum payment of $50,000. Only one payment can be made for Minor Heart Attack.
AMP Elevate Trauma Plus - Policy Extract
Heart Attack means the death of an area of heart muscle due to lack of adequate blood supply where: > there are diagnostic changes in relevant cardiac enzymes or biomarkers in the days following the heart attack, and > there are typical new ischaemic changes in the electrocardiograph (ECG): new ST-T changes or new left bundle branch block (LBBB).
If the above criteria are not met, we will pay a claim based on satisfactory evidence that the person insured has unequivocally been diagnosed as having suffered a heart attack resulting in: > a permanent reduction in the Left Ventricular Ejection Fraction to less than 50 per cent measured in the three months or more after the event, or > new pathological Q waves.
Other acute coronary syndromes including, but not limited to, angina pectoris are excluded.
Heart Attack (Other) Early Payment
In the case of a Heart Attack (Other) Early Payment, we will pay you the lowest of: > 20 per cent of the Benefit, or > $100,000.
Heart Attack (Other) means the death of an area of heart muscle due to a lack of adequate blood supply where, together with symptoms of ischaemia there are diagnostic changes in relevant cardiac enzymes or biomarkers in the days following the heart attack.
A Heart Attack (Other) must be confirmed by diagnostic changes in relevant cardiac enzymes or biomarkers and there will be no need for typical new ischaemic changes (new ST-T) or new left bundle branch block (LBBB) in the electrocardiograph (ECG).
Excluded: > non heart attack related causes of elevated cardiac enzymes or biomarkers, and > other acute coronary syndromes including, but not limited to, angina pectoris.
AIA Priority Protection – Crisis
‘HEART ATTACK’ (myocardial infarction) means the death of heart muscle as a result of inadequate blood supply to the relevant area. The diagnosis must be confirmed by a cardiologist and evidenced by typical rise and/or fall of cardiac biomarker blood test (Troponin T, Troponin I or CK-MB) with at least one level above the 99th percentile of the upper reference limit PLUS: – acute cardiac symptoms and signs consistent with myocardial infarction (e.g. chest pain) OR – new serial ECG changes with the development of any of the following: ST elevation or depression, T wave inversion, pathological Q waves or left bundle branch block (LBBB) OR – imaging evidence of new loss of viable myocardium or new regional wall motion abnormality. If the above tests are inconclusive we will consider other appropriate and medically recognised tests. Other acute coronary syndromes including but not limited to angina pectoris are excluded