MERLIN RISK WIZ. • INSURANCE GUIDE
Have you got enough cover to protect your family and lifestyle?
Most Australians significantly underestimate how much insurance cover they need — until an unexpected event makes the shortfall impossible to ignore. We help you assess your position clearly, and act on it.
95%
of Australians carry inadequate life insurance cover
70%
of pre-disability income replaceable via income protection
1 in 3
Australians receive a cancer diagnosis before age 85
With insurance, it’s good to know you and your loved ones will be financially sound if the unexpected happened.
WHY IT MATTERS
Sound financial planning begins with protecting what you have built
You insure your car. You insure your home. Yet the asset that funds everything — your capacity to earn — is often left inadequately protected, or not protected at all.
Comprehensive insurance coverage is the cornerstone of any well-constructed financial plan. It is not negative advice — it is a considered acknowledgement that financial obligations continue regardless of circumstances. The right coverage ensures your family retains the home, maintains their lifestyle, and is not forced into financial compromise at an already difficult time.
Default insurance via super is rarely adequate
Many Australians assume that the insurance provided within their superannuation fund is sufficient. In practice, default super insurance typically represents a fraction of the coverage required to meet real financial obligations. It is a baseline — not a comprehensive safety net — and should be reviewed against your actual circumstances.
UNDERSTANDING YOUR NEEDS
Determining an appropriate level of coverage
Calculating the right amount of insurance requires a clear assessment of your ongoing financial obligations. The central question is straightforward: what level of income or capital would your household require to maintain its current position if you were unable to work?
Mortgage or rent
Utilities & bills
Groceries & living costs
Family income if you're gone
Credit card & loan repayments
Children's education
Medical expenses
Transport & insurance
Totalling these obligations provides your minimum coverage threshold. Most people find there is a meaningful gap between that figure and the coverage they currently hold.
YOUR GREATEST ASSET
Protect your greatest asset – your income
Consider the numbers. At an annual income of $120,000 with 25 working years remaining, your future earning capacity represents over $3 million in projected value. Most Australians would not leave an asset of that magnitude without insurance cover.
70%
of pre-disability income, protected
Tax deductible
Premiums generally tax-deductible
Monthly Income
Ongoing benefit while unable to work
Should illness or injury prevent you from working, income protection provides a monthly benefit — typically up to 70% of your pre-disability earnings. Mortgage repayments, household expenses and family commitments continue to be met, allowing you to focus on recovery rather than financial management.
As income protection premiums are generally tax-deductible, the net cost of cover is often lower than most people anticipate. Your Merlin adviser can confirm the tax treatment applicable to your circumstances.
LUMP SUM COVER
Protect your family and lifestyle with lump sum insurance
Certain events — a permanent disability, a serious medical diagnosis, or premature death — demand a financial response that extends beyond monthly income replacement. A lump sum benefit can retire debt, fund ongoing care requirements, and provide your family with the financial stability to make considered decisions at a difficult time.
Pays a lump sum upon death or terminal diagnosis to address outstanding debts, funeral expenses and your family's ongoing financial requirements.
Total & Permanent Disability cover provides a capital sum if illness or injury renders you permanently unable to return to the workforce.
Provides a benefit upon diagnosis of specified serious conditions — including cancer, cardiac events and stroke — enabling access to appropriate treatment without financial compromise.
A well-structured insurance strategy typically incorporates all three types of lump sum cover, calibrated to your specific financial obligations, family situation and income profile.
LIFE CHANGES
Insurance coverage should evolve alongside your circumstances
A common and costly oversight is treating insurance as a one-time decision. Cover that was appropriate when you were single and renting is unlikely to reflect the financial obligations you carry today — a mortgage, dependants, business interests, and a lifestyle that warrants protecting.
Circumstances that warrant a coverage review
A new child
Each new dependant materially increases your family's reliance on your income. Life and TPD cover should be reviewed to reflect this responsibility.
Children starting school
Education is a significant long-term financial commitment. Factoring education costs into your coverage calculation ensures continuity for your children.
A property purchase
Your mortgage is likely your most significant liability. Your coverage should be structured to extinguish it in the event of death or permanent disability.
Start or grow a business
Business expense cover and key-person insurance become critical when your ability to operate the business is central to its viability.
Career growth
An increase in income elevates your lifestyle costs and family expectations. Income protection benefits should be reviewed to reflect your current earnings.
The financial cost of deferring coverage
Insurance premiums increase with age and deteriorating health. Each year without a review represents a year of potentially higher future premiums — or, in more serious cases, new health conditions that may result in exclusions or premium loadings.
Pre-existing conditions identified at application can be excluded from coverage. A health event that occurs before you obtain cover may permanently limit your options.
The appropriate time to secure coverage is when you are young and in good health. The second most appropriate time is now.
Premiums are generally lower for younger, healthier applicants
Most policies are guaranteed renewable — cover cannot be withdrawn due to changed health
Income protection premiums are generally tax-deductible
Cover can be structured personally or through superannuation — we advise on the optimal approach
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