Only 5% of Australian families have adequate insurance* Speaker’s name Title/department Month, 2015 * Lifewise/NATSEM Underinsurance Report 2010

Agenda Insurance and why it is important Types of insurance options available Insurance: inside or outside of super? Summary Next steps Questions

Insurance and why it is important

Having a Plan B Know the odds... You probably have car insurance. Most of us do. But why are we chronically underinsured when it comes to our most precious of all assets? In 2014, about 128,290 Australians are expected to be diagnosed with cancer (72,110 men and 56,180 women). An estimated 149,990 are expected to be diagnosed in 2020.* Each year, around 55,000 Australians suffer a heart attack. This equates to one heart attack every 10 minutes.** 4 * Australian Institute of Health and Welfare Cancer incidence projections: Australia, 2011 to Cancer Series No. 66. Cat. No. CAN 62. Canberra: AIHW ** Source –

Why is insurance important? How will your family financially cope without you? If death or disability occurs, will your family have enough funds to: continue their current standard of living (including servicing existing debt), and pay medical or funeral bills If a serious injury occurs, could you pay for: hospital costs and ongoing treatment time off work living costs for you and your family until you recover Ideally, you will have planned to help ensure there is enough cover to cope with these situations. 5

What types of insurance are available

What types of insurance are available? Term Life Total and Permanent Disablement (TPD) Living Insurance Income Protection (IP) 7

Term Life Pays a benefit in the event of death. The benefit is usually in the form of a lump sum. Some policies may include additional cover for terminal illness, permanent disability and/or specified medical illnesses. 8

Term Life Case Study: Sam & Susan Sam and Susan have 3 children, all of school age. Susan works part-time as a physiotherapist. They have a mortgage of $300,000 Two years earlier, Sam took out a life insurance policy of $500,000. Whilst driving home from work one night, a major accident on the freeway resulted in a four car pile up. Tragically, Sam was killed in the collision. The insurance proceeds helped pay off the mortgage with enough left over for investment to cover the children’s future school fees. 9 Example only

Total & Permanent Disablement (TPD) Pays a benefit if the Insured Person becomes totally and permanently disabled. The benefit is usually in the form of a lump sum and is received when the insurer’s definition of TPD is satisfied. The cover may assist with medical and rehabilitation costs and provide you and your family with financial security. 10

TPD Case Study: Sam In this case study Sam survived the accident but is now a paraplegic. Sam’s insurance cover included “own occupation” definition for the TPD benefit. As Sam worked as an ambulance officer he can no longer drive the ambulance vehicle or assist with manual handling of patients. Sam submits an insurance claim and, as he can no longer work again, he is paid out the sum insured lump sum applicable to the TPD benefit. He now intends to seek professional advice from a financial planner on how best to invest the proceeds. 11

Living/Trauma Insurance Pays a benefit if the Insured Person suffers a specified medical event such as cancer, stroke, heart attack or loss of a limb. You can use the benefit as you wish, for example to pay for expenses associated with medical treatment, mortgage repayments or give you time needed to recover. A lump sum payment is made if you suffer one or more of the specified medical events. 12

Income Protection Income Protection provides a regular monthly income to a person who is disabled and is unable to work because of sickness or injury. Depending on the product provider, you can receive up to 80% of regular monthly earnings in the event of sickness or injury if you are totally disabled because of sickness or injury and unable to work, or A partial disability benefit if you are on reduced duties and earning less than before your disability. 13

Income Protection Case Study: Matt & Joanne Matt, 35, is married to Joanne and they have two young children. He works as a foreman on a construction site and earns $75,000 p.a. or $6,250 a month. Matt has a mortgage on the family home and has been worried about his family’s ability to cope should something happen to him. He decides to take out income protection. A few years later, Matt is diagnosed with a blood vessel malformation – a condition that puts pressure on the lower spinal nerves and reduced his mobility. He required surgery and physiotherapy as well as a long period off work for rehabilitation. After waiting the 30 day waiting period, Matt receives $4, (75% of $6,250 per month) which allows him to continue his mortgage payments and meet daily living expenses. 14

Who may be covered with life insurance? Employees and self-employed Homemakers Medical Professionals People in Mining, Oil or Gas Business insurance – Key Man/Principal 15

Insurance: inside or outside of super

Insurance: inside or outside super? It is important to be smart about the structure of your insurance, so that the dollars you pay for premiums work harder for you. Whether you should hold your insurance inside or outside of super depends on your personal circumstances and needs. By choosing the right combination of insurance inside and outside super for you, not only can you have the appropriate insurance cover for your peace of mind, but you can do it in a cost and tax effective manner. 17

Tax treatment at a glance 18 * From 1 July 2014, only ‘any occupation’ TPD can be held inside super. Certain policies taken out prior to this date may include a ‘own occupation’ TPD definition, in such instances the policy will only be partially deductible to the super fund.

Insurance: inside or outside super? Case study John aged 36 Marginal tax rate 39% (including Medicare levy) Has $700 pre tax salary to purchase Life & TPD (any occupation) insurance cover Non-smoker Stepped premium quote required What cover can he purchase ? 19

Insurance: inside or outside super? Case study Insurance outside Super Insurance in Super Pre-tax salary available to purchase insurance $700 Less ($273) (n/a) Net premium available $427 $700 Sample life & TPD cover purchased $352,000 $573,000 Sample additional insurance cover purchased $221,000 20

Summary

We often say...it won’t happen to me.. In 2013, we paid out over $203 million in claims to over 2,500 customers That’s: Around $105 million to help families cope with the loss of a loved one; $69 million to help our policyholders manage through sickness and injuries; Regular payments totalling more than $29 million paid to our income protection customers when they are unable to work due to sickness or injury A range of smart and affordable insurance options to match your life stage and financial circumstances 22

Next steps Evaluate or review your insurance needs – consider the following factors: Your age Your family situation Your income and that of your spouse/partner Your debts (house and other) Your existing savings and investments Your financial and lifestyle goals Your health and that of your spouse/partner Speak to your Financial Planner about: Your individual circumstances The type and level of cover that is right for you. 23

QUESTIONS Disclaimer

This information was prepared by Asgard Capital Management Limited ABN , AFSL (Asgard). The information in this presentation is current as at August Material contained in this presentation is an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This presentation contains general information only and does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. All case studies and examples used in this presentation are for illustrative purposes only and nothing in this presentation should be construed as an indication or prediction of future performance or results. Any taxation position described in this publication should be used as a guide only and is not tax advice. You should consult a registered tax agent for specific tax advice on your circumstances. As the rules associated with the super and pension regimes are complex and subject to change and as the opportunities and effects differ based on your personal circumstances, you should seek personalised advice from a financial adviser before making any financial decision in relation to any matters discussed in this presentation.

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