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| FOCUS ON – PERSONAL INSURANCE |
In our first Focus on life insurance, we look at insurance in its various forms, pure life
insurance, trauma, disability and income protection. |
Life insurance is by no means a modern invention. Some 2000 years ago, in Roman times, a
form of life insurance was practised by burial societies. These societies paid the funeral costs
of members out of monthly payments to the societies.
Similar organisations sprang up in the Middle Ages in Britain as Trade Guilds tried to provide
for the funeral costs of members. These early societies and guilds had no data on which to
base their calculations, civilisation had not yet developed to the extent of recording births and
deaths and there was no real idea of how long people were expected to live for. It was only in
1582 that any effort was made to start collecting records of baptisms and burials which then
led to the structuring of mortality tables and costing of premiums as we know it today. In its
simplest form – the older you are the more likely you are to die.
Unlike most products that you purchase in our “buy now, pay later” economy, financial
products, and in particular, insurance, require you to pay now and reap the benefit later. You
are in effect, putting your faith into an insurance company to pay you in your times of need.
In this vein, our focus on life insurance is designed to give you a greater understanding in how
insurance products work, how you can calculate how much cover you need and some simple
steps to ensure you get the best value insurance product. |
Driving the cost of insurance
Whilst calculating how much insurance should cost you, there are a huge number of factors
that drive the cost of the underlying insurance: |
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- Age – The older you are the more likely you
are to die, and as a result the older you are the
more its going to cost.
- Sex – Women live approximately five years
longer than men and whilst this makes it
cheaper for them to look at life insurance,
they’re more complex anatomy means that
they suffer more illnesses, making it more
costly for health based insurances.
- Health – One of the primary drivers in
determining the cost of life insurance is yourhealth. Insurers look to protect the pool of
policyholders by loading premiums for new
applicants with poorer health and in some
instances will even refuse cover altogether.
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- Smoking – In most cases smokers will pay a
hefty loading due to the associated additional
illnesses and their shorter life expectancy.
- Occupation – This is a primary driver of cost
when looking at Income Protection but can also
impact on the rates for life, trauma and disability
cover. So, higher risk or higher skilled
occupations such as firemen or surgeons have a
higher cost associated with their cover.
Other additional factors that are not as obvious but
will nevertheless influence the underlying rate
include, where you live, your occupation, lifestyle,
the overall level of commission paid to a sales
intermediary as well as the underlying profitability of
the company.
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| You’d insure your car |
| You’d insure your home |
| Why wouldn’t you insure yourself? |
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| FUNDS FOCUS Investment newsletter: Issue 1, January 2008 |
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Order a ZERO entry fee PDS
To download or request a hard copy Product Disclosure Statement with no entry fee, please complete order form below. Portfolio Healthchecks and the Wealth Focus annual report can be faxed back on 1300 55 98 70 or posted to us for free at Wealth Focus, Reply Paid 760, Manly, NSW, 1655 |
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| What do we get paid |
Wealth Focus will rebate 100% of entry fee on managed fund investments as additional units. Wealth Focus may receive a trailing commission of up to 1.00% pa. depending on the manager we have a relationship with. This trailing commission is paid by the fund manager and is NOT an additional charge to the investor. |
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This month’s issue examines the opportunities that exist as a result of the “new economy”, where they are and how you can minimise some of the resulting volatility. |
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Challenger China Share Fund
The Asian growth story and China’s emergence into the outside world remains as compelling as ever. Could now be an opportune time to invest?
p12 |
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Merrill Lynch International Gold Fund
Gold can be considered an effective diversifier. Gold often performs well when financial markets perform poorly as investment managers look around for ‘insurance’ against financial instability and poor equity performance.
p14 |
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Macquarie - Globalis
BRIC Fund
Emerging markets continue to be the
fastest growing economies. We
examine Macquarie’s joint venture
into the BRIC economies and how
you can take part in the fastest
growing economies in the world.
p16 |
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Launch offer – Free
Portfolio Healthcheck
Probably the worst thing you can do
is sit on an portfolio full of proverbial
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somehow get their act together and
produce you the great returns
overnight. We’re giving investors the
opportunity to get a free report
across all their managed fund
investments.
p19 |
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