Wealth Protection: Does Your Insurance Match Your Lifestyle?

Why Wealth Protection Deserves Your Attention

You’ve worked hard to build the life you enjoy. Your home, your investments, your career, and your family are all part of that picture. Yet too many Australians overlook the simple question: would your lifestyle be protected if something unexpected happened tomorrow?

Insurance isn’t about worst-case scenarios. It’s about protecting the people and lifestyle you’ve built, so that illness, injury, or loss doesn’t undo years of planning.

The Insurance Gap in Australia

Research consistently shows that many Australians are underinsured. For example:

• Only around a third of households have adequate life insurance to pay off debts and provide for dependants.
• Income protection cover is often based on outdated salaries, leaving gaps of thousands per month if something happens.
• Trauma and TPD (Total and Permanent Disability) cover are often missing altogether.
  

The risk? A sudden life event could mean selling assets, draining superannuation, or leaving loved ones in financial stress.

Common Coverage Gaps

1. Income Protection That’s Out of Date

If your cover is based on what you earned five years ago, would it replace today’s salary? For many people, the answer is no. Without enough protection, day-to-day expenses and mortgage payments can quickly become overwhelming.

2. Life Insurance That Doesn’t Reflect Debts

Life insurance is often taken out with a first mortgage. Over time, as debts grow — or as you take on business loans or investment properties — the original policy no longer covers what’s needed.

3. Trauma and TPD Cover Overlooked

A cancer diagnosis, heart attack, or accident may not take your life, but it can change it dramatically. Without trauma or TPD insurance, families often rely on savings or super to cover treatment and lifestyle changes. That can delay retirement or force asset sales.

Insurance Needs Across Life Stages

Your needs change as your life evolves. Insurance should adapt too.

• Young professionals: Income protection is critical. Your ability to earn is your biggest asset.
• Families with dependants: Life insurance, trauma, and TPD cover become priorities. Protection ensures debts are cleared and children’s futures are secure.
• Business owners: Key person and buy-sell insurance are essential to protect both the business and your family.
• Pre-retirees: Insurance can often be scaled back, but a review is vital to avoid being over- or under-insured.

Lifestyle Shifts That Should Trigger a Review

• Marriage, separation, or divorce.
• Birth of a child or grandchild.
• Taking on a larger mortgage or new investment property.
• Starting or selling a business.
• Moving into retirement planning.
  

Each milestone creates new responsibilities — and potentially new risks.

Inside Super vs Outside Super

Many Australians hold insurance inside their superannuation. This can be convenient, but it’s not always enough.

Insurance inside super

• Often cheaper due to group policies.
• Premiums paid from super contributions, preserving cash flow.
• But cover types are limited (trauma insurance is generally not available).
  

Insurance outside super

• More flexible, with broader cover definitions.
• Direct payout to beneficiaries without superannuation tax complexities.
• Premiums paid from after-tax income, which can be a cash-flow challenge.
  

A balanced approach — holding some policies inside super and others outside — often delivers the best result.

How Much Cover Do You Really Need?

The right level of insurance depends on:

• Your income and ongoing living expenses.
• Your mortgage and other debts.
• Education costs for children.
• Medical or care costs in case of serious illness or disability.
• The retirement lifestyle you want to protect.

A simple check is to ask: would my family’s current standard of living continue if I was no longer around or able to work?

How Often Should You Review?

A yearly review is ideal. Even if nothing major has changed, small adjustments can keep your cover aligned with your lifestyle.

Tip: Treat insurance reviews like health check-ups. Preventative care often avoids bigger issues later.

Common Mistakes to Avoid

• “Set and forget” policies: Insurance needs to grow and adapt with you.
• Relying solely on employer cover: Default policies are often too small to cover debts and living costs.
• Focusing only on cost: Cheap premiums are meaningless if the cover is inadequate or exclusions are too strict.

Working With a Strategic Planner

Insurance is not just about policies — it’s about strategy. A Strategic Planner can help you:

• Match cover types to your current and future lifestyle.
• Ensure premiums are structured tax-effectively.
• Avoid gaps by coordinating policies inside and outside super.
• Build insurance into your broader wealth and retirement plan.

The RJS Approach to Wealth Protection

At RJS Wealth Management, we focus on protecting both your wealth and your lifestyle. That means not just replacing income or clearing debts, but ensuring your family’s plans — from schooling to retirement — stay on track.

Insurance is more than a safety net. It’s a foundation for confidence, knowing that no matter what happens, your goals remain within reach.

Book a chat with an RJS Wealth Management Strategic Planner today to review your insurance. Make sure your cover matches your lifestyle — and that your family’s future is fully protected.