Travel insurance

Posted on 14 January 2020
Travel insurance

MoneySmart
(ASIC)

Getting some peace of mind

Nothing ruins a holiday or business trip faster than lost luggage or an unexpected accident. Having travel insurance cover won't prevent things from going wrong, but it can make things much easier if you get into trouble.

What is travel insurance?

Travel insurance covers the costs of any unexpected events you might incur while traveling. When purchasing travel insurance, you pay an upfront premium to cover you for a set period. If you travel often, you can also purchase an annual travel policy.

What does travel insurance cover?

Travel insurance typically covers the financial losses caused by a range of events that may affect your trip before, during or even after it has occurred. This includes:

  • medical expenses from personal injury or illness
  • loss of luggage or personal items
  • theft
  • disruptions to your travel plans (e.g. cancelled flights, though it pays to check exactly which situations are covered).

What does travel insurance not cover?

Travel insurance usually does not cover:

  • injury from extreme sports (e.g. bungee jumping or white water rafting)
  • illness or injury caused by a pre-existing medical condition
  • pregnancy-related costs (not all insurers will automatically cover women over 22 weeks' gestation)
  • loss or injury from acts of terrorism, war and some natural disasters
  • loss or theft of unattended luggage (check your insurer's definition of 'unattended')
  • claims for travel to areas where an official travel warning has been issued
  • losses incurred due to the financial failure of an airline, hotel, other travel operator, or your travel agent.

If you're about to travel overseas, travel insurance should be an essential item on your trip checklist. You need to read the product disclosure statement (PDS) to find out what's covered and what's excluded, especially if you're planning any unusual activities or you have any pre-existing conditions. Cover can differ between insurers so shop around for the cover you want at a price you can afford.

Does travel insurance cover mental health?

Some travel insurance policies cover you if you need to cancel or change your travel plans due to a mental health issue that you suffer after buying the policy. Be sure to let your insurer know of any pre-existing conditions, including any mental health issues, before you take out a policy.

How to choose travel insurance

There are many travel insurers in the market and you have a range of options available when choosing your cover. Shop around to find a policy that suits your individual circumstances and travel plans.

Travel insurance does not have unlimited cover so it's important to choose the right level of cover for your circumstances. Read the PDS carefully to make sure that the things most important to you are covered and how much they are covered for.

Choosing your travel insurance policy

When choosing a travel policy find out:

  • the cost of the premium and any excess applicable to claims
  • what's included and excluded from the policy (and how this compares to what you intend to do on holiday)
  • if there are any age restrictions on the people covered by the policy
  • how much you are covered for (dollar limits) for claims on individual items and as a whole
  • what proof you need to make a claim
  • how to contact your insurer if you are overseas.

Exclusions often apply to 'at risk' activities like parachuting, abseiling, riding a moped or motorbike, as well as any injury sustained while under the influence of alcohol or drugs, or as a result of a pre-existing medical condition. Be honest about the activities you have planned and any personal circumstances that could affect the cover you need.

When you have chosen a policy, be sure to tell your insurer about any changes in your circumstances before or during your travels, as this may impact your cover.

Case study: Sarah's heart attack

When Sarah was planning a skiing holiday in New Zealand she took out travel cover in case she got injured or any of her possessions were lost or stolen. Sarah sometimes suffers from an irregular heartbeat (arrhythmia) but she was relatively young, very active and wasn't taking any medication, so she didn't think her travel insurer needed to know about it.

Five days into her holiday, Sarah suffered a mild heart attack on the ski slopes and had to be hospitalised. When she tried to claim back her medical expenses, her insurer denied her claim on the basis that she had failed to disclose a pre-existing medical condition.

If Sarah had disclosed her condition, she may have been able to get cover, for an additional premium, and would have been reimbursed for all her medical expenses.

Taking out insurance through your airline

Some airlines offer you insurance when you're buying tickets online. It may seem convenient, but it's smart to make sure the cover suits your needs and the cost is competitive, before you agree to buy it. Also watch out for travel websites that automatically select insurance for you, especially if you're travelling domestically.

Credit card travel insurance

Some credit card providers also offer insurance for overseas travel. The cost may be called 'complimentary' but is often included in the credit card's fees (like the application fee or annual fee) or its interest rate.

To be covered, you will usually need to pay for a minimum amount of travel costs with your credit card. For example, you could pay for your overseas return flight, or prepay some of your accommodation costs before you start your trip. Each policy is different, so make sure you check with your provider how to activate it.

As with all types of insurance, it's important to check the terms and conditions to make sure this kind of policy suits your needs. Insurance through your credit card may only cover the cardholder (not your spouse, children, or additional cardholders), and will generally only cover you for the trip you have paid for on your card and only for overseas travel.

Making a claim on your travel insurance

If you need to lodge a claim, be completely honest about events and any mitigating circumstances. There can be serious consequences for making a false claim.

Register your claim or inform your insurer that you intend to make a claim as soon as possible. Some insurers require you to inform them of any incidents within 24 hours.

Your travel insurance policy should include the policy number, details of what is covered and contact details of the insurer for assistance. Always keep a copy of your insurance policy with you when you are travelling.

Smart tip

Before you leave home, take photos of any expensive items you're taking with you, record the serial numbers, copy purchase receipts and make sure they're covered under your policy.

Preparing a travel insurance claim

Your claim is more likely to be accepted if you have the relevant documents:

  • Proof of travel - to verify the details of your trip, e.g. flight details, itineraries and hotel confirmations.
  • Doctor's report - to prove you became sick or injured while travelling. Written confirmation should be provided by a qualified member of the medical or dental profession.
  • Police report - if something was stolen, you were injured in an accident or you were the victim of a crime, your insurer is likely to ask for proof that the incident was reported to the police.
  • Valuations and proof of purchase - to prove that you own the item that was lost or stolen and verify how much it cost. This applies to items you've brought with you on your trip and anything you purchased along the way.

Don't forget to keep a copy of your claim that includes all the attachments and proof of submission (like your sent email or registered post details).

Australians and travel insurance

Our  Australians and travel insurance infographic  explains why Australians travel, where they go, what is covered and isn't covered by travel insurance and how to get the best policy for you.

How to complain about your travel insurer

If you've lodged a travel insurance claim and it's been rejected by the insurer, there are things you can do if you think you've been treated unfairly.

  • Lodge a written complaint with the insurer's internal dispute resolution department - Details of your insurer's internal dispute resolution process can be found in your insurance product disclosure statement (PDS).
  • Take your complaint to external dispute resolution - If you're not happy with your insurer's decision you can complain to the Australian Financial Complaints Authority (AFCA). This is a free independent service and any determination they make is legally binding on the insurer.
  • Seek legal advice - If you are still unhappy with the outcome you may choose to seek legal advice. Be aware there is a time limit on further action.

Travelling the world can be a great experience. Spending a little time to find the right insurance cover means you can spend less time worrying about something going wrong and more time just enjoying your trip!

Posted in: News  

Keeping track & lost super

Posted on 9 January 2020
Keeping track & lost super

Money Smart
(ASIC)

Find your lost super and get back on track

Your super is your retirement savings, so it's important to know what super accounts you have and how much is in them. Here we explain how to track down lost super, how to consolidate them and how to work out if you have enough super.

How to search for lost super

Have you kept track of all your super? If you've ever changed your name, address, job, or done casual or part-time work, you may have lost track of some of your super.

Smart tip

Look after your super because it needs to look after you in retirement.

You can check your super by registering for the Australian Taxation Office's online services via myGov. This will allow you to:

  • see details of all your super accounts, including any you may have lost or forgotten about.
  • find ATO-held super, held on your behalf when your super fund, your employer or the government couldn't find an account to deposit your super to.
  • consolidate your super into a single fund.

If you have recently opened a super account, it may take up to 6 months to appear on your MyGov account.

You can still consolidate your super by completing a balance transfer form for each super account you want to transfer from and mailing it to your new super fund. See consolidating super funds for more information.

Case study: Christian finds his lost super

Christian had just started his first full-time job after finishing university. He had worked a few casual jobs while studying, but hadn't thought much about his super. His new boss suggested he do a search to find any super he might have lost. Christian had already set up a MyGov account to do his tax return online but hadn't realised he could use the account to track his super.

When he logged on to his MyGov account he could see that he already had two active super funds with a combined balance of $2,500. He was really surprised that he had accumulated this much super from two casual jobs.

When Christian looked into each super fund, he found he was paying fees on both and also had insurance premiums being deducted from each account. He decided to consolidate his super into one account and chose the fund with the better overall long-term investment returns and lower fees. He used the super consolidation tool on the MyGov website to combine them into one fund and then told his employer to pay his super into his chosen fund.

Christian's retirement is a long way off but he knows that getting on top of his super now will put him much further ahead when he eventually retires

How to check your super statement

When you receive your annual super statement, review the information to ensure it's still correct. See checking your super statement for the things to look for.

Find out if you have enough super

We explain how much is enough super but we also have a range of super calculators to help you crunch the numbers:

If you want more money to spend in the future, you need to keep track of your super today. Finding lost super and bringing it all together will save money on fees and make your super easier to manage.

 

Posted in: News  

Write or update your will

Posted on 8 January 2020
Write or update your will

MoneySmart
(ASIC)

Having a valid will ensures your assets go to the people you want to have them. You might also consider granting someone you trust an enduring power of attorney to manage your affairs should you lose mental capacity.

It's a good idea to review your will and powers of attorney on a regular basis or whenever your circumstances change. Be aware of events that may invalidate your will, for example, a new marriage will void your will but divorce will not.

Guardianship of children

A will can also contain details of who will take legal guardianship of dependent children if something happens to both of you. This person is usually someone you trust to raise your children in a similar way to the way you are raising them, and someone who has the emotional and financial capacity to take on the responsibility.

Setting up a trust

If you have a lot of assets or a complicated family structure you may consider using a trust to hold your assets. A family trust can be created while you are still living. A testamentary trust is created by instructions in your will, in the event of your death.

You should ask a legal professional to check your estate plan to make sure it is valid.

Keeping your important documents safe

To make sure the person managing your estate can easily locate all of your financial information, set up a file listing all your assets, liabilities, insurance policies and other financial information.

The file should include all relevant details such as:

  • the financial institution, account number, name of the account
  • policy provider, policy number, date the policy commenced and is due to expire
  • any other information that may be required to accurately identify you or your account.

You should also include the latest account statement for these documents in the file. Don't forget to include financial products where you receive correspondence by email.

Consider keeping a hard copy and an electronic copy of this file. Keep the electronic copy in a secure data file and the hard copy in a locked filing cabinet that only the person managing your estate has access to. Do not include passwords or other access details that only you should know.

Here's a full list of all the important documents you should put in a safe place.

Don't leave behind a financial mess when you die. Develop a plan and get your paperwork in order to make sure your loved ones have one less thing to worry about when you've gone.

Posted in: News  

Choose face-to-face for your finances

Posted on 7 January 2020
Choose face-to-face for your finances

Money and Life
(Financial Planning Association of Australia)

Is more knowledge enough to help people do better with their money? New research shows seeking face-to-face advice from a professional can support better financial decisions.

When it comes to doing the 'right' thing, money decisions can be right up there with healthy eating and exercise. We might know that sticking to a budget, spending less and saving are things we need to be doing to keep our finances on track for future goals such as a family holiday, new car or home deposit.  But like skipping the gym to get an extra hour in bed on the weekend, sometimes we make choices about money that aren't based only on what we know.

Knowing too much can be confusing

This is an insight behaviour change agency Karrikins Group share in their recent report How to really build financial capability. In the course of her research and analysis for the report, award-winning neuroscientist Dr. Emily Heath has explored what works and what doesn't for financial education programs. Her findings highlight the fact that many of these initiatives are based on an assumption that boosting financial knowledge will result in better choices and outcomes for the people involved.

Thanks to the digital age we live in, easy access to knowledge about our money options isn't hard to come by. But as this report highlights, the more information we have, the harder it can be to take in and assess the pros and cons of so many different options. "There is increasing choice among financial products, so that consumers have to comprehend, analyse and compare a snowballing number of options when making decisions," writes Dr. Heath.

This is an experience with financial decision-making that Australians have put words to in a recent report by ASIC. In group discussions and interviews more than 60 people were asked to share their views on financial advice. One participant said "I can research all I want but really, we need a professional. I am not sure [our] reading will land us anywhere." Dr. Heath is in agreement that your average person can't be expected to make sense of the huge range of financial options available, not to mention all the complicated jargon that comes with them. "Expecting a consumer to acquire all of the knowledge, insight and comprehension required to manage and maintain their financial decisions is like expecting a patient to perform surgery on themselves," she writes.

What does drive better money choices?

After debunking this myth about the direct link between more knowledge and better financial outcomes, Dr Heath sets out to pinpoint the factors that do help people improve their financial choices and outcomes. In the report she lays out 10 principles for designing effective financial support programs, from focusing on willpower to getting the timing right for an intervention.

At number five on this list is building personal human connections. Dr Heath emphasises the important role other people play in influencing our financial choices and behaviours. In reviewing a number of financial education programs, she discovered that having advice or support delivered face-to-face made a big difference to the impact on people's actual behaviour. "Efforts to change financial behaviour are the most effective when the influencer (or educator) is able to form a personal, human connection with the person they are trying to influence," she writes.

A personal approach makes a difference

The report goes on to say that tailoring advice to meet individual needs is an important part of this face-to-face approach to setting people up for financial success. This idea that there is value in getting professional financial advice that matches our unique situation is backed up by survey findings in the ASIC report. One of the biggest benefits people saw in seeing a financial planner was "that financial advice could help them to make the most of their financial circumstances by improving their financial decision making and setting up the right behaviours (e.g. saving) for future success. "

Another key area where survey participants felt professional advice could make a difference was in helping them feel less stressed and anxious about their finances. This is another issue that Dr. Heath says can cloud decisions about money and lead to poor financial outcomes. "Put simply, stress changes our brain and makes us more prone to mistakes of thinking, feeling and execution," she writes. "This is likely to have large effects on financial decision making."

Whether you're looking to remove the stress from a major financial decision like taking out a home loan or just want to feel that you're making money choices in your best interests, a CERTIFIED FINANCIAL PLANNER® professional can help. They can work in partnership with you to understand your goals and recommend a plan to give you the confidence that your financial future is secure.

Posted in: News  

Super for employers

Posted on 16 December 2019
Super for employers

MoneySmart
(ASIC)

As an employer, you have to select a default super fund to make super guarantee payments for your employees who have not chosen their own fund.

Here we explain how to choose a super fund for your employees.

What the super fund you choose must offer

The fund you choose needs to be a fund that is authorised to offer a MySuper product these are known as 'employer-nominated' or 'default funds'.

For more detail on your super obligations as an employer see the Australian Taxation Office's article on setting up super.

Comparing super funds for your employees

Industrial awards

When selecting a super fund start by checking the industrial awards applicable to your employees. There may be particular funds listed as default funds for your industry under an award.

Fees

Check the fees your employees will be charged by the fund. Low fees are generally good, but you should look at what your employees will get for their money.

Investment options

MySuper products must have a diversified investment strategy. Risks, returns and fees can vary. For example, a MySuper product that has high fees and high performance might offer a very aggressive asset allocation and take risks to get those returns.

Consider the types of employees you have in the business. For example, if the average age of your employees is under 30 you might look for a more aggressive fund.

A fund that offers a MySuper product may also offer a range of other different investment options, such as cash or shares. Your employees may find it helpful to have access to these options if they want to change their investment mix at a later stage. Some MySuper products provide a lifecycle approach to super where the investment mix changes as members get older.

See our MySuper webpage to understand the difference between a single diversified investment strategy and a lifecycle approach.

Performance

Pick a fund that has performed well over (at least) the last 5 years. Do not chase last year's best performer. The fund may have higher fees but strong performance might justify the expense.

Insurance

MySuper products must offer insurance on an 'opt -out' basis. Consider the cost and what your employees get for their money. Cheap insurance cover may have significant exclusions. For example, casual or part-time workers may not be adequately covered. Conversely, paying more for insurance can affect super balances. You need to weigh up the pros and cons.

Extra benefits

What else does the fund offer? Some super funds offer educational seminars and advice. Does the super fund have a good website that helps you find information easily?

Beware super funds offering incentives

Superannuation laws mean incentives generally can't be offered to employers that could influence their choice of a default super fund. Incentives could take any form, and include corporate hospitality, holidays, or discounted rates on products or services.

For example, a super fund cannot offer you tickets to a sporting event or discounted rates on loans. This could reasonably be expected to influence your choice of fund.

Case study: Jane's super fund offers tickets to events

Jane has just started a small business and is considering what default fund is appropriate for her staff. Jane makes some enquiries with an industry fund about what they offer. The fund tells Jane they will send her complimentary tickets to a major sporting event.

Jane is worried that she shouldn't be accepting these gifts and selects another fund for her sales team. Jane decides to report this to ASIC.

Case study: Michael's super fund offers discounts

Michael runs a small manufacturing business. He is considering selecting a new default super fund for his staff. Michael is a long term customer of ABC Bank that also offers a super fund. In conversations with the bank, they tell Michael that they would like to offer him a special discounted interest rate on his business loan and a new overdraft facility.

This raises alarm bells for Michael because even though he has a good relationship with the bank, he knows the bank is not allowed to offer him this type of incentive. Michael decides not to go with ABC Bank's super fund.

If you think you've been offered unlawful incentives by a super fund you can report it to ASIC.

Make sure any incentives do not distract you from making an informed decision. Focus on what's best for your employees.

You may also be contacted by funds telling you about their MySuper product. Some advertising from super funds say that one fund is better with insurance, returns or fees than another. Be wary about these comparisons as they may not be comparing like with like.

Always take time to carefully consider information from super funds and seek a professional opinion if you need to.

Picking a super fund for your staff is an important decision. Take the time to do your research and seek help if you need it. 

 

Posted in: News  
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