[00:00:00] Molly: Riddle me this, what is the one thing you want to buy, but never. Insurance. So today we're talking about how to keep you yourself and your loved ones protected. We've got Marni Maloney, who is one of our L S C Ambassadors and a brilliant mortgage broker to help break it down for us and talk about which insurances do we actually need, ones are the most important, and which ones can we get?
Super and out of our super. This is such an important topic, so please listen up and let us know if you've got any questions on our Facebook group. Ladies, finance Club, money Chat. All right ladies. Enjoy.
Thank you so much for joining us on the podcast, Marni.
[00:01:27] Marnie: You're welcome. Thank you for having me.
[00:01:29] Molly: so why do we need insurance?
[00:01:32] Marnie: Because literally anything can happen. you can be the best planner, best budgeter, best saver, work all your life, and we spend so much time working and then it, it can all come undone by just a sudden medical event throwing us off our path. So really, what is the alternative to insurance to stop that from happening?
So you could either use everything that you have in the bank to cover you while you go back to work or, you know, rely on loved ones. And I hear that a lot from people that they've got family members with sufficient funds that would carry you if something went wrong.
But is that what you really want? Do you want your loved ones having to cover your expenses while you can't work from a sudden medical event? For me, I know personally I don't want my parents or my loved ones having to take care of me while I can't work. So it's kind of aspirational having insurance, meaning that you don't have to worry about anyone having to look after you and taking money out of their pot to look after you.
[00:02:27] Molly: Yeah. And so there's a couple of different types of insurances. So obviously there's like, private health insurance, we've got like travel insurance, we've got like car insurance, home con, all that kind of stuff. But the insurance we're talking about, this is kind of like your personal insurance.
[00:02:41] Marnie: Yeah, so it's personal life insurance, so life insurance if you pass away or if you become totally and permanently disabled and you can't go back to work again, either in your occupation or any occupation. Income protection, really important. So, for things that are temporary or longer term ones, they're going to replace your income or 70% of your income if you can't physically or mentally.
Perform the duties of your role. And there's trauma insurance or it's got a lot of different names. So trauma, insurance, crisis benefit, living benefit, basically that's paid on diagnosis of a critical illness.
[00:03:17] Molly: Okay. And what's considered critical,
[00:03:20] Marnie: So anything that is potentially life-threatening. So, got your cancers, heart attacks, strokes. There's about 40 plus conditions on a good trauma policy. you know, it doesn't necessarily mean that you'll stop working, but you are diagnosed with a serious illness.
[00:03:36] Molly: Okay, so there's kind of like four in that part. So we've got life insurance, which could be called death insurance cuz you get it if you die. So we've got income protection, so that protects your income if you are unable to work for a period of time. We've got T P D, so total permanent disability if we're unable to perform our job and then we've got critical illness.
[00:03:57] Marnie: Yes, that's
[00:03:57] Molly: Cool.
[00:03:58] Marnie: So having a combination of all those four things is a really good way of addressing each area. And there's a lot of confusion around, you know, if I have income protection, why would I need trauma insurance? Or if I've got trauma insurance, why do I need income protection?
Income protection kicks in when you are so sick that you can't perform the duties of your role, whereas trauma insurance kicks in on diagnosis. So you might get, cancer diagnosis. But still be well enough to do the duties of your role, but you don't want to necessarily go back to work. You wanna focus on your recovery.
So you might want, the option to step back from work so that you can do that rather than having to wait until you can't perform the duties of your role, or that you are, cancer is advanced to a stage where you can no longer do that.
So it gives you options.
[00:04:41] Molly: yeah, and we hear a lot of people, I think at Ladies Finance clubs say well, why would I get insurance? I don't even earn that much. Well, what would you say to that?
[00:04:51] Marnie: I would say your ability to earn an income is your most valuable asset. So, the younger you are, the longer you have until retirement. Let's talk about even, $50,000 a year. you know at the age of 25 or the age of 30, you've got 35 more years where you would be earning $50,000 a year. So if something prevented you from doing that and you never got to, fulfill that career and earn that kind of money, that's the asset that you're trying to protect.
you don't have to wait until you're on 180,000 a year
[00:05:20] Molly: 50 K times 30. That's a lot of money
[00:05:22] Marnie: It is a lot of money. We're talking in the millions, so if you had a, a house that was worth, $3 million, you'd ensure it, wouldn't you?
[00:05:28] Molly: Yeah. I think sometimes we forget. Cause I always ask that question. I say what's the most valuable thing you have? And people will go, like, my house, my car, my watch, my smile. But my ability to work rarely pops up.
[00:05:41] Marnie: And I come across, a lot of families where they only are really concerned about the main breadwinner. But there's all the unpaid work that you do as well for the family. That can be really valuable. So, let's say the partner who is earning less but doing more at home, the pain bread we might need, to take a step back to look after that person.
And then they might need to get an extra person in or an o pair to look after the kids. So, everyone is really valuable just. Your paychecks are different. Doesn't mean you know one's more valuable than the other.
[00:06:08] Molly: Yeah. And is that something you see where it's like, and I'm just gonna use for the example, the man here, because it's very common in Australia that women will be the ones who take off time to have kids and things like that. Do you find it quite common that only the men have insurance?
[00:06:24] Marnie: Yeah, I find that that's been a mindset that's always been around. So when I was working for the firm that I was with before now I found that it was really the men who was leading the conversation and they said, let's ensure my. My income, let's not worry about, my wife.
and you know, finance as a whole was always that way. And, you know, I've been very fortunate talking to ladies finance club women because there's such great. Clients to have, they come on board and they're like, okay, I don't know anything.
Tell me everything. or they've done a lot of research and they're really switched on about things, but they just need a little bit of guidance. But they're willing to, open up to the process and also be like very practical in the way they think about things. So, they do think about, okay, well what happens if I pass away, what's gonna happen with the kids?
Who are they gonna be with? Do we need to pay out the home or would we. sell our assets, or do I need to keep the assets for the consistency of the kids so they're not just thinking about, assets and liabilities, you know, what's the net if I sell everything, which can be a male mindset women are really good at thinking about, well, what's, what's actually gonna happen?
What do I need? What do I feel comfortable with?
[00:07:23] Molly: Yeah. I remember speaking to a single mom in the UK on our, UK podcast back in the day. she had just taken out total income protection insurance. And like literally six months later she got a cancer diagnosis completely out of the blue. it was that income protection insurance that actually saved her bacon completely.
Do you hear many stories like.
[00:07:44] Marnie: Well, I've done a lot of claims in my time, I've done income protection claims. Trauma claims, TPD claims, death claims.
[00:07:51] Molly: Is there any in particular that have really stood out that you can share?
[00:07:55] Marnie: well, yeah, there's, one. I remember when I started early in, and I think this is why, these stories of really successful claims really stuck with me and that was it for me. That's all I wanted to do after that.
Cause I wanted to make sure that any family or any person who's going through a difficult time medically had someone they could go to to get their hands on the money and across to them as soon as possible. So, there was a woman who, we all loved, beautiful woman. She was diagnosed with leukaemia.
On a Friday, she told us about it on Monday we got the paperwork together. All the doctor's reports submitted the claim forms, had the trauma benefit paid into her account the following Friday, and just to be able to make that phone call after, because she had young kids and she had her husband who. staying home, looking after the kids. and she had a lot of debts and things like that, so she was a real high flyer really, really amazing woman. And all of a sudden she was just thinking about the kids, thinking about the family. I dunno how long I have to be able to make that phone call and say, look, the financial side of things is gonna be okay.
Just focus on you. Spend time with the. Spend time with your husband, for the time that you have left. that was one of the ones where I was like, I can see the benefit for sure. I've had a client who I actually met, and I think I might have mentioned this to you before, so I met him and he was, buying an investment property and he was taking on more debt.
And I said, okay, well let's look at your insurance. And he said, well, I can't get any more insurance because I've had Hodgkin's
lymphoma. And I said, oh, okay. Well, I'm sorry to hear that. When was that? And he said, that was four years ago, and I knew he had a trauma policy that started six years ago.
So I said, okay, well, why is it that you didn't claim on your trauma policy then? And he said, well, I didn't take any time off work, so I didn't think I could. To which I said, well, that's not how trauma works. Let me submit a claim form for you. It took about three months because we're talking about a claim that was, should have happened four years ago, but the insurer paid out the trauma cover and also paid back all the premiums that they had taken for the four years beforehand.
And he was like, I can't believe that. So
why it's really important for me to be able to bridge the gap between what people understand about insurance. Because even if they under it, when they buy it, it's so easy to forget why you have it or how it works. So it's really important for me to, speak to my clients, as often as possible and reeducate them on what they have and why they have it.
And make sure it's, you know, affordable long-term because you don't want them to have it for a couple of years and then realize they can't afford it anymore and then stop paying for it. So that advisor-client relationship's really important to me. That's why I.
[00:10:35] Molly: it's so good. with insurance, so you mentioned it before, if people are thinking like, I can't afford all insurances. Is there rule of thumb, like, if you can't afford any insurances, then have this.
[00:10:45] Marnie: my personal belief is income protection. I think that's really, really important. Most of Australia have some insurance inside their super. It's default cover, which really doesn't have any relevance to what you need. and a lot of people think, oh, you know, I've got it.
So if anything happens, I'll be fine. But really it's, statistically, it's very low compared to what they wa what they actually need. and then sometimes, You know, when I speak to ladies finance club, people who are, perhaps a bit younger, don't have any dependents or debt.
They have this default life cover that they don't actually need because when they pass away, they have all their assets that are just passing onto someone who's not a beneficiary. So they find that they're paying for something they don't need when they, that money could be better used for income protection,
[00:11:29] Molly: and can you claim on more than one insurance policy? So if you have two supers and you have insurance in both, can you claim on both or just one?
[00:11:37] Marnie: Yeah, you can, they need to know about each other though. So the first policy is
fine. The second policy needs to know about the first.
[00:11:46] Molly: Mm-hmm.
[00:11:47] Marnie: And then if you add a third policy, that third policy needs to know about the first and the second.
So you can't have. A combination of policies that would, have a 20 million payout because there's a maximum that you're allowed to have. Particularly with income protection, one insurer is not gonna pay out income protection and then another insurer, payout income protection.
And then the combination of those two things would put you above the 70% of what your salary would be, cuz that would put you in a better position on claim than what it would other.
[00:12:15] Molly: So, so people should probably check that because if they've got multiple supers and they've got multiple insurances, they might be paying too much.
[00:12:22] Marnie: Yeah. It's absolutely worth looking at. Maybe every two years. And then just, you know, sort of running it against a few different insurers. I think there's the myth that super insurance was always cheaper.
I'm finding that that's not the case at the moment. Particularly for, healthier individuals with A B M I of under 28 and a half. There are insurers who will give you upfront discounts for that. So I find. When we're comparing people like that, then you know you'll get better discounting in a retail insurer.
[00:12:52] Molly: Great. And with an insurance broker like yourself, like we talked to a mortgage broker recently and they were we call them like the shopping stylist, so they know all the loans out there and which one's gonna be best for your circumstances. Insurance brokers are kind of the same, aren't they? So you guys know what all the different providers are providing, and so if you are.
X female, maybe one health issue in the past, boom, boom, boom. You'll be able match them with their
[00:13:20] Marnie: Absolutely. We can make you a bespoke, tailored suit. So, initially we'll probably have a good idea of which insurer would be the most competitive because they have certain sweet spots for you. But then when you get deeper into it and you do an application if there's some medical history as well, certain underwriters will. Things differently than other insurers. So, you know, one that, that is coming up a lot at the moment is mountain
biking. So certain insurers will exclude mountain biking depending on what type of mountain biking you do, whereas others won't. So, you definitely find when you get into the nitty gritty, certain insurers will be better for you than others. It's definitely worth negotiating once you do get, because you don't have to, once you've done your application, you don't have to take the terms that they give
you it's a good idea to go and look at other ones. And particularly if you're doing your insurance through super, they can be a little bit tougher in terms of underwriting.
So yeah, it's definitely worth, shopping that
[00:14:13] Molly: during like Covid, like I think everyone was on a mental health plan at one point, or a lot of people were. Does that affect insurance?
[00:14:23] Marnie: It does. If you've already got insurance, it doesn't affect it. If you are starting new insurance, it is taken into consideration. Now insurers do look at the. Type of, you know, mental health plan, why you went on the mental health plan, how long it's been, what type of treatment, or all those sorts of things.
As a general rule of thumb, they would like to see if it's brand new, it's hard for them to confidently say that you're not gonna need some time off work for mental health. So, they would just sort of put a blanket, mental health exclusion on it, but that can be removed after, a period of time
where you don't have any treatment or symptoms.
But I do like, I really applaud people, having a mental health plan and, being checked in mentally as much as they are physically going to, to a doctor. So don't let that stop you.
From getting insurance or disclosing it or going and taking care of your mental health cuz you're worried about your insurance because it's so common for people to have a mental health exclusion on their income protection of total impair disability, but it can be removed and there's so many other things that you can
So yeah, don't let that be too much of a deterrent, because if you've disclosed that you are seeing someone and you, then you're having a tough time and you stop working, then it's kind of one of the easier ones between you and me to claim one.
So, yeah, that's why they cast a
[00:15:43] Molly: Yeah.
[00:15:44] Marnie: when it comes to mental
[00:15:45] Molly: Yeah, because I, and I think that's a good point as well. Like sometimes people think insurance is just like health injuries, but it's also mental health as well.
[00:15:51] Marnie: Yeah, and I have, I have done claims for mental health before. I met someone who was working in commercial real estate. And so she was used to that sort of fast paced, high pressure, and then all of a sudden she had a complete mental breakdown and she was completely triggered by anything to do with her work.
So she couldn't walk into the building without, having full panic attacks. So she had two different policies. She had an M L C policy and a Zurich policy, and they both paid out.
And then she will be on claim to some extent for the rest of her life. But those two policies make sure that she's earning the same as what she was when she was in that role. So she might end up, Doing something that's a lot less stress, but the difference between what she starts earning in her new role and what she was earning will be covered by income protection until she's 65.
[00:16:41] Molly: Oh my gosh. Wow. So, yeah, I think it's so important, ladies. That we have that income protected
[00:16:46] Marnie: a lot of people, think, that would never happen to me, but there is just no one that you would, I think it would happen to. So it's, yeah. She's someone that I, would've thought would be hit by a car before that happens. So
[00:16:55] Molly: yeah. it's the same with my sister. Like we thought she had a virus. It was. Stage four blood cancer. we didn't have any cancer in our family. No history. And she didn't have insurance cuz we didn't really know about insurance back then.
, She had done like the consolidating of her super funds and she got rid of any insurances that she had. And she was in that situation where she had to rely on her savings of. Was lucky. She had a lot and and family. And luckily we're in a fortunate position where, my parents could help, but had she had that income protection there, it just, it just means it's not even a thought and you can just focus on getting better.
[00:17:30] Marnie: Yeah. And do you mind me asking, does she have some sort of long-term effects now in terms of her workload and things
[00:17:37] Molly: Yeah, she struggled with chronic fatigue for a very long time after she's doing really well at the moment. She's just done this thing called the Lightning process, which has completely like helped rewire brain and it's really helped with her chronic fatigue. But yeah, she really struggled for like two, three years afterwards.
[00:17:54] Marnie: Yeah, I,
[00:17:54] Molly: told us. .
[00:17:55] Marnie: yeah, and I think that's the thing why trauma and income protection work well together is because, I also had a friend who was in her twenties when she was diagnosed with brain cancer she was in remission within the year. And she works now, but it affected her short-term.
So, you know, years on, she can only work at a certain capacity. So, and she's a school teacher, so she has to job share and, she can only really do three days a week. So that's going to affect her, you know, for the rest of her working life. So, she would've qualified for a trauma payout, but she also would qualify for income protection because the doctor, has recommended that she.
can't actually do five days a week, so that's why I think that those things are really important. But yeah, income protection first,
[00:18:38] Molly: And I think the big question is kind of how much is that gonna set me back? Like is it gonna be. Super expensive. What are we looking at? I know it'll be different from person to person, but Yeah. How much kind of does that Income protection cost per month?
[00:18:51] Marnie: So it depends on your age, when you start your gender, your occupation type. so if it's more manual, it's gonna have a little bit of a loading. Cos there's a higher risk So if you know you're at nine to five, then you know there's less of a risk.
If you're high educated, high income, then the income protection's a little bit cheaper. So there's also different leaves that you can pull to make it, more expenses or less expensive. There's a 30 day waiting period, 60 day waiting period, 90 day waiting period.
So if you can cover your. For, the first 60 days and that, that's going to be cheaper than 30 days. And then, there's different benefit periods as well. So you could have a two year benefit, a five year benefit And, you know, if you calculate replacing your salary at 70% for two years that's the value of the asset that you're protecting.
If you do it for five years, that's the value of the asset that you're protecting. So expect the premiums to go up because the asset's higher. You know, you can that through super, or you can pay that in your personal name. If it's in your personal name, you can get a full tax deduction for it.
Or if it's through super, then you know the premiums come out of super. And that can be from any super. It doesn't have to be where the insurance is, it can be anywhere. . But if you are young, the premiums are really cheap. So, I think it's really worth putting the money there,
[00:20:07] Molly: Okay. And if someone's listening to this money and they're like, holy hell, I need to get on top of my insurance. This was the wake up call I needed, or it's been on the to-do list for a while. How can people find you?
[00:20:19] Marnie: You can find me, you can go through my website which is www.protectedlife.com au. You can contact me via email, marni protected life.com au.
[00:20:31] Molly: we'll link them in the notes as
[00:20:33] Marnie: life.
[00:20:33] Molly: And now we just have a few questions we ask all our speakers who come on. where did you grow up and did you always think you would work in finance?
[00:20:41] Marnie: I was born in New Zealand in Auckland, but I flew over with my family and we moved to the Northern beaches, so up in Avalon. And I definitely not, did I think that I was gonna be working in finance? I thought I was gonna be a dancer, or a writer uh, something like that. But yeah, no, ended up working for some really good friends who had their own financial planning specializing in life insurance and just fell in love with it,
[00:21:04] Molly: Awesome. And how do you budget, do you do bucket spreadsheets? Is it in your head or an app
[00:21:09] Marnie: I'm more like a, reactive than proactive . So you know, me and my husband monitor our spending. We, we use ComBank so they, you know, really easily bring up how you spent your money each month. And then we just adjust. for the next month. But we're, we're really pretty good with our money or he is.
So, um, I'm kind of following easily my family, spent money on entertaining and, we probably spend our most money on food and wine, you know, out with friends cuz we're quite
[00:21:35] Molly: Yeah.
[00:21:36] Marnie: we're
[00:21:37] Molly: Great. And what's the best piece of the money advice you ever got?
[00:21:40] Marnie: I probably got this advice too late, and I know you feel the same that you're never too young to start investing. and I wish I had started doing it when I was 20. But now actually I, with my kids, I've got them this Sprige
Have you heard of
pri? Yeah. yeah. And so they can see, you know, they can do the jobs and they can see what they're saving, what they're spending and how they're investing and how it increases. And if they wanna transfer, their saving to, you know, putting more into their investments.
And I think they're much more checked in with finance than what I was when I was a
[00:22:12] Molly: Well, Yeah. That was probably gonna happen. Love that. Do you have any favorite podcasts or books you're reading at the moment?
[00:22:18] Marnie: well, I mean, I just started reading, uh, sorry. Finish reading. Where the cord dad
[00:22:22] Molly: Oh yeah. Oh, Oh, was that good?
[00:22:25] Marnie: Have you read it? It's, I really, really liked it. I, I tend to not watch the movie now that read the book cuz it's, never quite as good.
But I've literally just started reading Change your thinking. Which is, you know, all about sort of changing that, negative self
dialogue and you know, not stewing on things that happened sort of months ago, which is yeah, I think probably really healthy for me.
I think that's by Sarah Alderman.
[00:22:47] Molly: Awesome. and a live hack that you love that not many people might know about.
[00:22:51] Marnie: well, I think I might be behind the ball in the hacks. I just went traveling. I just went
[00:22:56] Molly: Yeah.
[00:22:57] Marnie: Does everyone know about these travel money cards?
[00:22:59] Molly: do, tell.
[00:23:00] Marnie: Well, okay, so I think they came out a few years ago,
so basically it's just a card and you can load. over 10 different currencies on there. So if you are going to, you know, Singapore and then you're going to the UK or something like that, you can transfer a sum of money and then hit the exchange rate on the day that you transfer so you don't have multiple international transactions fees.
You pick it on a date, if you know you're going away and you see the, you know, exchange rate's really good, Chuck the money in that date, get a really good rate. And then for the whole trip you've got that rate every time you use, just using the same card.
So yeah, much less fees, way easier. It connects to your app, like your normal, you know, banking app so you can see everything that's coming out. So rather than, you know, getting. A huge amount of cash out and changing it over and walking around with all this cash, which is what we used to do. I thought this
[00:23:49] Molly: Yep. Travel cards are the bomb and also in cards are quite good traveling internationally cuz you don't get international fees on ATMs or anything as well.
[00:23:56] Marnie: yeah, yeah. That's what, that was the deal with this one as well. And then also when you set that up, they, you know, contact you and say, oh, we see you're going overseas. Would you like complimentary travel?
[00:24:05] Molly: Awesome. Well thank you!
[00:24:08] Marnie: Thank you very much.