Your life insurance is flexible and can be adapted to your changing needs. Make sure you have a cover review with your adviser every 12-18 months to ensure you’re covered or when major life events occur, for just the right amount, paying the right amount, and getting the best value from your policy.

Every 12-18 months, make sure you ask yourself, have you:

Welcomed any new members to the family or taken on new responsibilities such as caring for an older relative?

You might want to add a new beneficiary to your policy or increase your amount insured to cover for your growing family’s future needs and the increased financial responsibility you have.

Changed jobs or got a promotion?

Your income is your biggest asset over the course of your life. If your income has changed, your future needs have likely changed too – so you’d benefit from reviewing your sum insured with your financial adviser.

This is especially important if you’ve got income protection. That’s because your benefit amount, and the premium you’re paying, are directly linked to the personal income we have recorded on your policy.

If your income has changed, get in contact with your financial adviser to review your policy.

Paid off large debts?

The amount you’re insured for is to cover for your future financial needs should something happen to you. If you’ve significantly paid down large debts, your needs may have changed.

You may want to think about reviewing your sum insured to ensure it’s right for your needs – not too little, and also not too much.

Taken on any new debts?

Being insured for the right amount is an important factor of cover suitability. Customers usually need a level of cover that can, as a minimum, pay off any existing debts should something happen to them. If you’ve taken on new debts, your needs may have changed.

You should review your cover with your financial adviser to ensure you’re covered for the right amount.

Does your policy have a health loading? Has your health improved – or have you stopped smoking?

Personal risk factors such as smoking and your Body Mass Index (BMI) add what are called ‘premium loadings’ to your cover – which means you pay a higher premium than someone who doesn’t have this risk factor.

If your health has improved (e.g. you’ve lowered your BMI or your lifestyle has changed recently), get in touch with your financial adviser to review your policy and determine if these loadings can be removed to help lower your premium.

If you answered YES to any of these questions, you could benefit from reviewing your cover with the help of your financial adviser.

Ways you can adapt your cover to your current needs:

1) Choose the amount you’re insured for

Your premium is closely linked to the total amount you’re insured for. And it’s important to make sure you’re covered for the right amount, not too little, not too much. To find out more, see How much cover do I need?

Choosing the premium type that’s right for you can have a big impact on the lifetime cost of your policy, and your financial adviser will be able to help with forecasting that impact.

3) Choose to accept or decline indexation

Indexation, if available, is an automatic increase to your sum insured to ensure the value of your policy is not eroded by the impacts of inflation.

But you’re in control – it’s important to know that as the sum insured increases, the premium you pay may also increase. This means there are circumstances in which you might want to decline the indexation offer. Speak with your financial adviser about what is best for your personal circumstances.

4) Remove any loadings you might have

Personal risk factors such as smoking, dangerous hobbies or occupations, or a high Body Mass Index (BMI) may add what’s called a ‘premium loading’ to your cover – which means you pay a higher premium than someone who doesn’t have those risk factors.

Any loadings like these are recorded on your Policy Schedule. So, if your health improves or your lifestyle has changed recently, get in touch with your financial adviser to review your policy and determine if these loadings can be removed to help lower your premium.

In the end, you’re in control – you can review your cover with your financial adviser and adapt it to your needs.

Stay in control of your policy – book a cover review with your adviser every 12-18 months.

Some advisers offer a review service every 12-24 months, so make sure you enquire about this in order to stay in control of your policy.

The Reserve Bank of Australia is looking for more clarity on the current state of inflation, having likely accelerated since its last set of forecasts in February.

The central bank left the official cash rate unchanged at a record low 0.1 per cent at Tuesday’s monthly board meeting, but indicated that it is now more concerned about the outlook for inflation.

Economists are now expecting an interest rate rise as early as June.

Annual inflation was already running at 3.5 per cent at the end of last year, but the RBA had previously expected it to edge up to 3.75 per cent by June, holding above its two to three per cent inflation target.

Assistant RBA governor Christopher Kent told a Senate hearing on Wednesday this expected pick-up in inflation was prior to the invasion of Ukraine by Russia.

The war has pushed commodity prices higher, coming alongside supply chain issues impacting manufacturing goods.

There are also potential supply chain issues from China as it struggles to manage a COVID-19 outbreak, while at the same time floods on the Australian east coast have affected food and construction prices.

“There are a lot of moving parts and you have got to take it holistically,” newly promoted deputy RBA governor Michele Bullock told the hearing.

RBA governor Philip Lowe notably dropped the word “patient” in his post-meeting statement on Tuesday, having repeatedly used it in the past in terms of needing to lift interest rates.

He also warned the board will be monitoring the data closely from now on.

Economists expectations for the first rate rise – likely to be a 0.15 per cent increase to 0.25 per cent – are now clustering around the June 7 board meeting.

This would be after the release of the consumer price index for the March quarter on April 27, and the wage price index on May 18 for the same period.

Deutsche Bank Research chief economist Phil O’Donaghoe has brought forward his expectation for the first rate move to June from August and predicts a further three 0.25 per cent increases over the rest of 2022 taking the cash rate to one per cent.

“We pencil in the August, November and December meetings as likely dates for those three subsequent hikes,” he said.

Treasury does not believe government spending in last week’s federal budget will inflame inflation or alter the outlook for interest rates.

The 2022/23 budget papers show the government made $39 billion worth of new spending decisions, which includes an $8.6 billion cost-of-living package.

Luke Yeaman, deputy secretary of Treasury’s macroeconomic group, told senators that given the size of the overall economy, he did not expect this would have a material impact on inflation.

“We don’t believe that level of spending is going to materially change the profile of interest rates,” he told senators on Wednesday.

Treasurer Josh Frydenberg tried to soothe the concerns of voters, saying many households are in a position to absorb a rate rise.

“Australians are about 36 months ahead on mortgage payments if you take into account offset accounts,” he told the Nine Network.

“And what the Reserve Bank said yesterday was that household budgets were in a strong position.”

But Dr Lowe also said “rising prices are putting pressure on household budgets and the floods are causing hardship for many communities”.

Shadow treasurer Jim Chalmers was unsurprisingly not impressed with the treasurer’s comments.

“If Josh Frydenberg doesn’t understand that interest rate rises will hurt and if he thinks that wages growth is strong enough, then he’s even more horrendously out of touch than we feared,” Dr Chalmers told reporters in Brisbane.

What trauma insurance covers

Trauma insurance, also called ‘critical illness’ or ‘recovery insurance’ pays a lump sum amount if you suffer a critical illness or serious injury. This includes cancer, a heart condition, major head injury or stroke. Trauma insurance does not cover mental health conditions.

What’s covered under a trauma insurance policy and medical definitions can be different between insurers. To understand what’s covered under a trauma insurance policy, read the product disclosure statement (PDS).

A critical illness or serious injury can make it difficult to continue to work. Trauma insurance can help support you and your family at this time and pay for medical and rehabilitation costs.

Trauma insurance can be used to help pay for:

• out-of-pocket medical costs
• living expenses for you and your family while you’re unable to work
• the cost of therapy, nursing care and special transport
• changes to housing if needed
• paying back your debt, for example, a mortgage

Deciding if you need trauma insurance

When deciding if you need trauma insurance and how much, think about:

• how much income you and your family would need if you couldn’t work for some time
• if you have income protection insurance or total and permanent disability (TPD) insurance, these can help replace lost income. You may hold these insurances through your super fund
• if you have private health insurance that could help pay for some medical expenses
• what support from family or friends may be available

If you need help deciding if you need trauma insurance and how much, speak to a financial adviser.

How to buy trauma insurance

You can buy trauma insurance:

• through a financial adviser or insurance broker
• directly from an insurance company.

You can choose to buy trauma insurance on its own or packaged with life cover and TPD insurance. If you buy trauma insurance packaged with life cover, your life cover could be reduced by the amount paid out on a trauma claim. To see if this applies to a policy, read the PDS or ask your insurer.

Super funds no longer offer new trauma insurance policies. But if you were in a super fund that offered trauma insurance before July 2014, you might still have it through your super fund. Check your member statement or contact your super fund to find out.

Before buying, renewing or switching insurance, check if the policy will cover you for claims associated with COVID-19.

Compare trauma insurance policies

Before you buy trauma insurance, compare policies to make sure you get the right one for you. Check:

• the critical illnesses and serious injuries covered
• exclusions
• waiting periods before you can claim
• limits on cover
• premiums – now and in the future.

A cheaper policy may have more exclusions, or it may become more expensive in the future.

Compare how long different insurers take to pay a trauma insurance claim and the percentage of claims they pay out.

What you need to tell your insurer

You need to tell your insurer anything that could affect their decision to provide you with trauma insurance. You need to give them this information when you apply, renew or change your insurance.

This can include your:

• age
• job
• medical history
• family history, such as a history of disease
• lifestyle, for example, if you’re a smoker
• high risk sports or hobbies, such as skydiving

If an insurer doesn’t ask for your medical history, the policy might have more exclusions or narrower medical definitions.

The information you provide will help the insurer to decide:

• if they should insure you
• how much your premiums will be
• terms and conditions for your policy

It is important that you answer the questions honestly. Providing misleading answers could lead to an insurer to decline a claim you make.

Andrew Brown
(Australian Associated Press)

Measures to address cost of living concerns will be a key component of the upcoming federal budget, according to the prime minister.

With less than a week until the 2022/23 budget is handed down, Scott Morrison said work was being finalised on ways to address the soaring cost of essentials such as petrol and groceries.

“Addressing those cost of living pressures will be a key priority of that budget,” he told the Nine Network on Wednesday.

“We’ve been carefully designing our response because what we don’t do is have knee-jerk reactions on things like the economy.”

The government will be hoping to use the budget as a springboard ahead of the federal election due in May.

Meanwhile, Opposition Leader Anthony Albanese has thrown his support behind budget measures that tackle the rising cost of living.

However, he remained tight-lipped on whether Labor supported calls to temporarily cut the 44.2 cents per litre fuel excise, in the wake of rising petrol prices.

“We’ll assess all of it, we’ll wait and see,” he told ABC TV.

“There’s a range of measures that are putting pressure on family budgets, the biggest of which is that we just simply aren’t keeping up with the cost of living.”

The Labor leader hit out at the prime minister, saying the government did not have plans to actively address rising living costs.

“Housing costs are going up, the cost of food and groceries are going up, these are all having an impact on people’s capacity to pay their bills and to get by,” he said.

“The only thing that isn’t going up is wages, and wages are projected to fall in real terms again further over the next four years.”

It comes as the government announced on Wednesday $5.4 billion of funding would be in the budget to build the Hells Gates Dam in north Queensland.

The government will guarantee funding to build the dam, which is expected to create 7000 jobs, subject to completion of the final stage of the business case, expected in June this year.

Up to 60,000 hectares of irrigation would be opened up through a 2100 gigalitre dam bolstered by three downstream irrigation weirs.

Mr Morrison said more dams were needed in Australia to support agricultural industries

“We’ve done the homework on Hells Gates Dam and it’s now time to get on and build it,” he said.

“This dam will help turn the Burdekin region into an agricultural powerhouse, helping our farmers to stock supermarkets and feed Australia while also securing north Queensland’s water supply and security.”

With transport a key issue for regional areas, a further $29 million in the budget will go towards upgrading regional airports.

Applications will open for grants of between $20,000 and $5 million to help cover up to half of eligible project costs.

Also on Wednesday, the government announced $700 million has been set aside to support specialist medical training in regional areas.

The government’s specialist training program will be continued for four years from 2022, with $708.6 million being spent on its expansion.

The program, which has been running since 2010, allows for local doctors to be trained across medical specialty areas.

Maeve Bannister and Colin Brinsden
(Australian Associated Press)

Business groups believe the Morrison government is taking a “smart approach” to deregulation with a budget proposal to reduce red tape, while improving the cash flow for small businesses.

In the latest measure to emerge from his pre-budget blitz, Treasurer Josh Frydenberg announced a reduction in the pay-as-you-go tax instalment rate to two per cent for the 2022/23 income year from the standard 10 per cent.

A reduced uplift rate is expected to lower instalments and deliver $1.85 billion in cashflow support.

Treasury estimates more than two million businesses and sole traders currently using the pay-as-you-go instalment method will benefit from the changes.

Mr Frydenberg says the returns from the package will allow small and medium-sized businesses and sole traders to invest, innovate and grow job opportunities.

The government will also support companies to manage their cash flows by allowing them to calculate PAYG instalments based on their annual financial performance.

Other measures involve automating tax instalment calculations, sharing data collected by the tax office to allow tax returns to be pre-filled, and digitising income reporting for trusts.

They are expected to result in annual compliance savings of more than $800 million a year.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said this is a smart approach to deregulation.

“Practical measures to reduce the handbrakes on business will save time on compliance, reduce costs, and boost efficiency, benefiting all Australians,” Mr McKellar said.

“The strength of our economic recovery is contingent on removing the regulatory burden on business, particularly for small and medium enterprises.”

The Tax Institute said being smarter with technology is also a welcome measure.