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The Insurances I Would Never Buy... From an Insurance Expert · She's On The Money

• 0:00
  Speaker 1: My name is Tatasha Bamblet. I'm a proud First Nations
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  Speaker 1: woman and I'm here to acknowledge country t Glenn Young
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  Speaker 1: Ganya nianar Kaka yah Ya bin Ahaka nian Our gay
• 0:11
  Speaker 1: In Mbina, yakarum Jar, Dominyama, Domagahawakaman, damon Imlan Bomba ban
• 0:17
  Speaker 1: Gadabomba in and now in wakah Ghana on yak rum
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  Speaker 1: Jar water Nadaa. Hello, beautiful friends, we gather on the
• 0:24
  Speaker 1: lands of the Aboriginal people. We thank acknowledge and respect
• 0:27
  Speaker 1: the Aberiginal people's land that we're gathering on today. Take
• 0:30
  Speaker 1: pleasure in all the land and respect all that you see.
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  Speaker 1: She's on the Money podcast acknowledges culture, country, community and connections,
• 0:40
  Speaker 1: bringing you the tools, knowledge and resources for.
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  Speaker 2: You to thrive. She's on the Money. She's on the Money.
• 1:07
  Speaker 2: Hello and welcome to She's on the Money, the podcast
• 1:10
  Speaker 2: that keeps your finances ready. Whatever plot twist is coming next.
• 1:14
  Speaker 2: If life three you were curveful tomorrow, would you be
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  Speaker 2: ready for it? Because here's the thing. Most of us
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  Speaker 2: don't find out we've got the wrong cover until it's
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  Speaker 2: too late. So how do you know if you're wasting
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  Speaker 2: money on pointless policies or missing the one thing that
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  Speaker 2: could actually save you. Stick around because we're pulling back
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  Speaker 2: the curtain on the insurances we would never buy and
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  Speaker 2: the ones you simply can't afford to ignore. I'm Victoria
• 1:38
  Speaker 2: Devine and today we are joined by someone who knows
• 1:41
  Speaker 2: the insurance world inside and out, mister Phil Thompson. He's
• 1:46
  Speaker 2: an insurance expert and Big Dog CEO of Sky Wealth.
• 1:51
  Speaker 2: And if there's anyone who can help us sort out
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  Speaker 2: the financial fluff from the real deal, it is this guy.
• 1:56
  Speaker 2: Welcome back to the show, Phil. I'm excited I did
• 2:00
  Speaker 2: that you're here again and that you've somehow consented to
• 2:03
  Speaker 2: be on my podcast again.
• 2:04
  Speaker 3: I appreciate changing my title to Big Dog. I'll go
• 2:07
  Speaker 3: back to the office and big Dog and flow that around.
• 2:09
  Speaker 2: My name on Slack for a long time was big
• 2:13
  Speaker 2: Bad Bulls with lots of doubu's and s's at the end.
• 2:17
  Speaker 2: But you will be very excited, and I don't know
• 2:18
  Speaker 2: if their reference is going to be completely over your head,
• 2:21
  Speaker 2: but my name on Slack now is Victoria Labuobu.
• 2:24
  Speaker 3: That's you know, how old I am and how not? Yeah,
• 2:28
  Speaker 3: my profile.
• 2:29
  Speaker 2: Picture is a pink labooboo and my status is currently
• 2:31
  Speaker 2: set as really ugly.
• 2:33
  Speaker 3: I do know what la booboos are, which is one
• 2:35
  Speaker 3: of my past three kids said no and the kids
• 2:38
  Speaker 3: don't know what it is. But one of our teams
• 2:40
  Speaker 3: said I want to spend four hundred dollars on this.
• 2:42
  Speaker 2: Absolutely not. That's why it's my profile because I just
• 2:47
  Speaker 2: think that they are so ridiculous. Anyway, we wouldn't spend
• 2:50
  Speaker 2: money on labooboos in this house, and also on dodgy insurance. Now,
• 2:55
  Speaker 2: before we start calling out the most cooquestionable insurance products
• 2:58
  Speaker 2: on the market field, I think we actually need to
• 3:00
  Speaker 2: have a chat about just how big the insurance industry
• 3:03
  Speaker 2: really is. The Australian insurance space is worth more than
• 3:07
  Speaker 2: one hundred and fifty billion dollars a year, with general
• 3:10
  Speaker 2: insurance like car and home and travel making up nearly
• 3:14
  Speaker 2: sixty six billion dollars worth of that. And I would say, Phil,
• 3:17
  Speaker 2: that's a lot of cover. That is a lot a
• 3:20
  Speaker 2: lot of cover like that could buy you a new house,
• 3:23
  Speaker 2: like that could buy you a new car. And when
• 3:25
  Speaker 2: you zoom in, the average osy household is spending somewhere
• 3:29
  Speaker 2: between fifteen hundred to two thousand dollars every single year
• 3:33
  Speaker 2: on general insurance. So I guess it's no wonder that
• 3:36
  Speaker 2: people want to know whether they're actually getting some value
• 3:39
  Speaker 2: out of this or not. And Peel, I know you
• 3:42
  Speaker 2: have definitely seen it, all the good, the bad, the ugly.
• 3:47
  Speaker 2: And I was blown away when I saw that one
• 3:49
  Speaker 2: in five Australians have bought insurance that they don't fully understand.
• 3:55
  Speaker 2: Add to that fact that nearly half of us aren't
• 3:57
  Speaker 2: even confident our insurers are going to come through if
• 4:00
  Speaker 2: we need to claim, and it starts to make sense
• 4:02
  Speaker 2: why insurance can actually feel consistently or maybe just like
• 4:06
  Speaker 2: something we would rather avoid. So I guess let's start there.
• 4:09
  Speaker 2: Feel why does insurance get such a bad rap? I mean,
• 4:13
  Speaker 2: it's your entire career, so I'm hoping you.
• 4:14
  Speaker 3: Know the answer. Yes, we work in a subsect of
• 4:17
  Speaker 3: the insurance, so we don't walk across the whole gambit
• 4:19
  Speaker 3: of it.
• 4:20
  Speaker 2: But so you're not going to sell me pet insurance,
• 4:22
  Speaker 2: no iPhone insurance, no I will car insurance, insurance, So
• 4:28
  Speaker 2: all of the stuff that I probably shouldn't be spending
• 4:31
  Speaker 2: money on to begin with, you don't sell me.
• 4:33
  Speaker 3: That's right, the thing interesting want to replace yourself, Yeah,
• 4:36
  Speaker 3: you probably don't need insurance for that.
• 4:38
  Speaker 2: So talk to me about insurance, because I feel like
• 4:41
  Speaker 2: so many of us we think we're doing the right thing,
• 4:43
  Speaker 2: and we go ahead and we ensure something like we
• 4:46
  Speaker 2: might be at Apple buying a brand new phone and
• 4:48
  Speaker 2: they offer insurance, and we go, well, this is a
• 4:49
  Speaker 2: really big purchase and it's really important, and this guy's
• 4:52
  Speaker 2: just told me that like insuring it is a very
• 4:54
  Speaker 2: good financial decision.
• 4:55
  Speaker 3: So we do it.
• 4:57
  Speaker 2: But so many of them, I would say, are comp
• 5:00
  Speaker 2: completely unnecessary? What do you reckon? The most unnecessary insurance is?
• 5:04
  Speaker 3: I mean iPhone insurance? My phone insurance is often like
• 5:08
  Speaker 3: incredibly expensive and not necessary. These extended warranties. Any time
• 5:13
  Speaker 3: I go to jbhigh.
• 5:14
  Speaker 2: Fie, don't when you're extended warranty, like the whole product
• 5:17
  Speaker 2: is going to be out of like fashion by the
• 5:19
  Speaker 2: time that extended warranty is.
• 5:21
  Speaker 3: Yeah, I've used it once. I bought it an extended
• 5:23
  Speaker 3: warranty once, and I had a warranty client. But I
• 5:26
  Speaker 3: just was like, it's literally five years ago. I don't
• 5:28
  Speaker 3: I'm not going back and talking about my laptop. They're
• 5:31
  Speaker 3: broke in the last five also, like I need a
• 5:34
  Speaker 3: new laptop at that point exactly. So those extended warranties,
• 5:37
  Speaker 3: really they're just insurance policies. That's what they are, and
• 5:40
  Speaker 3: that's what they're built for. And so the type of
• 5:43
  Speaker 3: insurance policies that I don't love. Really at the end
• 5:45
  Speaker 3: of the day, insurance is about protecting something that you
• 5:49
  Speaker 3: can't afford to lose. And so the things that you know,
• 5:52
  Speaker 3: like health insurance is really important because you may have
• 5:54
  Speaker 3: a health event that is really significant costs. Health insurance
• 5:58
  Speaker 3: has that. If you have a car that's worth fifty
• 6:00
  Speaker 3: thousand dollars and if you wiped it off and hit
• 6:03
  Speaker 3: someone else's car, well you need insurance for that because
• 6:06
  Speaker 3: it may be a significant cost if you can't afford
• 6:08
  Speaker 3: to pay that, which all of us can't.
• 6:11
  Speaker 2: Yeah, and I think that from I'm an ex financial advisor,
• 6:14
  Speaker 2: you're a current proper financial advisor. I think from outside
• 6:18
  Speaker 2: of the story, we just see so many people who
• 6:20
  Speaker 2: you know, have car insurance, have like house and land
• 6:24
  Speaker 2: insurance or whatever, and then they don't have income protection,
• 6:28
  Speaker 2: and you just go, I see that you can see
• 6:30
  Speaker 2: value in it, but you can't see value in your
• 6:33
  Speaker 2: own income. Why do you think that's a thing, because
• 6:36
  Speaker 2: so many Like if you ask me, Victoria, you have
• 6:39
  Speaker 2: to get rid of every single insurance under the sun.
• 6:41
  Speaker 2: What one that you're keeping, you get one I can
• 6:44
  Speaker 2: always guarantee this is the one you would keep as well.
• 6:46
  Speaker 2: And for me, it's income protection. Like I know that
• 6:49
  Speaker 2: if my body breaks, I can still pay for my son.
• 6:53
  Speaker 2: I can still you know, make sure that my mortgage
• 6:55
  Speaker 2: or payments are being made and that I've got income
• 6:57
  Speaker 2: coming in the door each and every single month. Whereas
• 7:00
  Speaker 2: if my car broke, well, I can use my income
• 7:04
  Speaker 2: right now to purchase a new one. But if my
• 7:06
  Speaker 2: car broken I didn't have income protection, we are in
• 7:10
  Speaker 2: a bit of a pickle, right, Like my body is
• 7:12
  Speaker 2: the thing that is the most valuable to me, and
• 7:14
  Speaker 2: it just it blows my mind that people don't see that.
• 7:17
  Speaker 3: I think people just underestimate the value of their income.
• 7:20
  Speaker 3: So one thing that we do internally, it's gone we
• 7:24
  Speaker 3: don't really talk to a client about this too much
• 7:25
  Speaker 3: as much as we probably should, is we calculate the
• 7:28
  Speaker 3: value of someone's income based on their today's income, assuming
• 7:31
  Speaker 3: you're just a CPI inflation increase on their income, no
• 7:34
  Speaker 3: pay rises or anything like that, and assuming retirement at
• 7:36
  Speaker 3: age sixty five, and if you get someone on a
• 7:39
  Speaker 3: relatively modest income that's fairly young, the value of their
• 7:43
  Speaker 3: income is millions and millions of dollars. And so people
• 7:46
  Speaker 3: just don't really equate that. Oh, if I'm on fifty
• 7:49
  Speaker 3: thousand dollars or one hundred thousand dollars or whatever income
• 7:51
  Speaker 3: I'm on till retirement and compounding that year or on year,
• 7:55
  Speaker 3: and that loss that's really significant. And so yes, the
• 7:59
  Speaker 3: likelihood of a claim maybe lower than dropping your phone
• 8:02
  Speaker 3: and breaking your phone and needing that replace but the
• 8:06
  Speaker 3: cost of that replacement of my income is really significant,
• 8:09
  Speaker 3: and we probably understate or underestimate that value of our
• 8:12
  Speaker 3: our own income.
• 8:13
  Speaker 2: But Phil, I've got like, I've got income protection in
• 8:16
  Speaker 2: my subernuation. I saw there was like a two year
• 8:18
  Speaker 2: policy there. That's good, isn't it well?
• 8:21
  Speaker 3: To cover your income for two years? It is good? Yeah?
• 8:23
  Speaker 2: And what about after those two years? Phil, Am, I
• 8:25
  Speaker 2: good to go?
• 8:26
  Speaker 3: Exactly. This fun thing about insurance it's always this balance
• 8:28
  Speaker 3: between how likely is something to happen and what's the
• 8:30
  Speaker 3: cost of that thing. So from an insurer's point of view.
• 8:33
  Speaker 3: I always love getting stats on insurers and like where
• 8:36
  Speaker 3: are they spending their money? From an income protection point
• 8:39
  Speaker 3: of view, most of their claims are for policies that
• 8:43
  Speaker 3: only last for two years. So the claim you know,
• 8:45
  Speaker 3: someone's injured and then goes back to work after six.
• 8:47
  Speaker 2: Months, good, that's the perfect outcome.
• 8:49
  Speaker 3: And that's majority of their claims in terms of raw
• 8:52
  Speaker 3: numbers that they're processing. But the cost to their business,
• 8:56
  Speaker 3: more than eighty percent of their cost for income protection
• 8:59
  Speaker 3: is actually for clients that go longer than two years.
• 9:02
  Speaker 3: And so you think about it from the other point
• 9:03
  Speaker 3: of view, if insurers are paying most of their money
• 9:06
  Speaker 3: towards those long term claims, we want to make sure
• 9:09
  Speaker 3: we're protecting that. So if you go into your super
• 9:12
  Speaker 3: far and you log in and you look at you've
• 9:13
  Speaker 3: got an income protection that only lasted two years, think, yes,
• 9:16
  Speaker 3: that will protect me from majority of the times I
• 9:19
  Speaker 3: will ever need this.
• 9:20
  Speaker 2: But for the really big stuf it gets really real.
• 9:23
  Speaker 3: Then you know you're going to be well under insured.
• 9:26
  Speaker 2: Yeah, And I think a lot of people go, oh, well,
• 9:28
  Speaker 2: that's such a good deal because it's through my superinuation
• 9:31
  Speaker 2: and like, you don't have to necessarily get rid of that.
• 9:33
  Speaker 2: You can talk to a good financial advisor and get
• 9:36
  Speaker 2: that topped up. Like I remember when I first got
• 9:39
  Speaker 2: my income protection sorted, I had my two year policy,
• 9:42
  Speaker 2: which is why I always bring it up. I have
• 9:44
  Speaker 2: my two year policy, and then I had one outside
• 9:46
  Speaker 2: of supbranuation as well, and I was kind of carrying
• 9:48
  Speaker 2: both for a while because that's what put me in
• 9:50
  Speaker 2: the best possible position, because obviously suberinuation was a nice
• 9:54
  Speaker 2: little tax benefit, but having inside super for the entire
• 9:58
  Speaker 2: time didn't make financial logical sense. Now, two of the
• 10:02
  Speaker 2: most I would say divisive types of insurances. I would say,
• 10:06
  Speaker 2: lots of people get heated about private health insurance, whether
• 10:10
  Speaker 2: you need it, whether you don't, like we've got Medicare
• 10:12
  Speaker 2: in Australia, and other is pet insurance. So Phil, I
• 10:16
  Speaker 2: want to know what are your thoughts on both of these.
• 10:19
  Speaker 3: So your pet insurance, let's go. I don't have a pet.
• 10:23
  Speaker 2: No I do, And for this conversation, let me give
• 10:25
  Speaker 2: you a little bit of context. I paid for pet
• 10:28
  Speaker 2: insurance when we got Lucy in twenty twenty one, and
• 10:31
  Speaker 2: it cost me about four hundred and eighty dollars in
• 10:34
  Speaker 2: premiums for the year and I got fifteen thousand dollars.
• 10:36
  Speaker 3: Worth of car. Yeah, so if you ever needed to
• 10:38
  Speaker 3: claim you were capped at fifteen thousand dollars and you
• 10:40
  Speaker 3: couldn't get it was something significant you weren't getting more
• 10:43
  Speaker 3: than that. I personally don't love pet insurance because of
• 10:47
  Speaker 3: the cost versus the value that you're going to get
• 10:49
  Speaker 3: for it can be a misbalance there, So I personally
• 10:52
  Speaker 3: don't love it. But just like with any type of insurance,
• 10:55
  Speaker 3: like for yourself, making sure you've got the ability to
• 10:58
  Speaker 3: save enough money for that outside risk. So if something
• 11:01
  Speaker 3: happened to Lucy, you've got the money there save. It's
• 11:04
  Speaker 3: not going to impact your last style. You're not going
• 11:05
  Speaker 3: to go eat baked beans for weeks on end to
• 11:07
  Speaker 3: afford it. But I would it's my dog, yeah, because
• 11:11
  Speaker 3: everyone does. Everyone will will spend a lot of money
• 11:13
  Speaker 3: on their pet when they're sick ill. It's in the
• 11:15
  Speaker 3: extension of their family, and so that's something that you
• 11:19
  Speaker 3: just need to be aware of. You either pay an
• 11:20
  Speaker 3: insurance premium to cover that cost, or you have the
• 11:23
  Speaker 3: money available or access to that money. So it is
• 11:26
  Speaker 3: really important. Although I if I had a pet, I
• 11:28
  Speaker 3: probably wouldn't have pet insurance. I would make sure we
• 11:31
  Speaker 3: had some form of.
• 11:32
  Speaker 2: Yeah the cash in the side, Yeah cash, And I
• 11:34
  Speaker 2: think that's the important thing. Like when I got Lucy,
• 11:37
  Speaker 2: it was my first time owning a dog, and I
• 11:38
  Speaker 2: was like, I'm going to do all of the right things.
• 11:40
  Speaker 2: I'm going to get paid insurance. And then you know,
• 11:42
  Speaker 2: after the year was up and they sent me my
• 11:44
  Speaker 2: premium again, I was like, I am very like, I'm
• 11:48
  Speaker 2: in a very privileged position to have enough savings that
• 11:51
  Speaker 2: if something happened to Lucy and it cost me fifteen
• 11:54
  Speaker 2: thousand dollars, Like, I don't really want to spend my
• 11:56
  Speaker 2: savings on that, but I could. And so I just
• 11:59
  Speaker 2: made the content decision to start putting an extra five
• 12:01
  Speaker 2: hundred dollars a year into savings instead, because I was like, well,
• 12:04
  Speaker 2: that just seems to make more sense. And thankfully, knock
• 12:07
  Speaker 2: on wood, up until this point, she has not cost
• 12:09
  Speaker 2: me fifteen thousand dollars.
• 12:10
  Speaker 3: And to be fair, if something ever happens, you will
• 12:13
  Speaker 3: never save the premiums to cover the cost. You just won't.
• 12:17
  Speaker 3: If something happens. It's just making a bet that hey,
• 12:20
  Speaker 3: hopefully something doesn't happen, that we don't need it. The
• 12:23
  Speaker 3: thing about insurance is I don't think it's wrong for
• 12:26
  Speaker 3: anyone to get pet insurance at all. Oh, I think
• 12:28
  Speaker 3: it can be right.
• 12:28
  Speaker 2: It's divisive, like so many people are like that's a
• 12:31
  Speaker 2: scam or that's a good it's not, but like, is
• 12:34
  Speaker 2: it in line with your values?
• 12:35
  Speaker 3: Yes? And I think it's important to think about what
• 12:38
  Speaker 3: is our total cost of insurance and do we have
• 12:41
  Speaker 3: the right ones. That's where it's a conversation where for
• 12:44
  Speaker 3: someone it may be okay to have pet insurance if
• 12:46
  Speaker 3: they have certain other insurances that you know that we
• 12:50
  Speaker 3: believe to be more important. If you're protecting your own
• 12:52
  Speaker 3: income and you've ticked that box, If you're protecting your
• 12:56
  Speaker 3: own life disability, like making sure your own personal insurance
• 12:59
  Speaker 3: is covered and sorted, and you've got ability to afford
• 13:03
  Speaker 3: the pet insurance as well, then great, go and spend
• 13:05
  Speaker 3: money on that. The thing that I kind of have
• 13:07
  Speaker 3: a disagreement on is if someone says I don't want
• 13:09
  Speaker 3: to have personal insurance, I'm going to cancel my income
• 13:12
  Speaker 3: protection because the premiums are too expensive. Totally fair and reasonable,
• 13:16
  Speaker 3: But then go and pay pet insurance and go. Unfortunately,
• 13:19
  Speaker 3: Lucy's not making much money for you. No, it's just
• 13:23
  Speaker 3: a straight cost. Your ability to earn an income is
• 13:25
  Speaker 3: making money, so protecting that is more important. So it's
• 13:28
  Speaker 3: all about how do we prioritize these insurances properly?
• 13:31
  Speaker 2: Yeah. I think that there's also a fair bit of
• 13:33
  Speaker 2: confusion if you've never looked at your insurances before, to go, well,
• 13:37
  Speaker 2: why would I see a financial advisor to talk about like,
• 13:40
  Speaker 2: you know, income protection and TBD. Like I've got private
• 13:43
  Speaker 2: health insurance. I feel like that is such a common
• 13:46
  Speaker 2: response when I say, oh, have you got insurance, They're like, yeah,
• 13:48
  Speaker 2: private health, and you go, that's actually not enough. Is
• 13:52
  Speaker 2: that still something that you guys are coming up against
• 13:55
  Speaker 2: consistently in conversation.
• 13:56
  Speaker 3: Yeah, because the cover that we help people set up
• 13:58
  Speaker 3: is the personal insurances and for events like cancer, heart attack, strokes,
• 14:03
  Speaker 3: or we're just mental health time off work, the personal
• 14:06
  Speaker 3: insurance cover will pay you for those events. And so
• 14:09
  Speaker 3: people think, well, I've got private health. If I have cancer,
• 14:12
  Speaker 3: I'll just go through the private system and that's okay.
• 14:15
  Speaker 3: And I just got off the phone last week with
• 14:18
  Speaker 3: a client who found out she had cancer.
• 14:20
  Speaker 2: That's the worst part of your job, Like.
• 14:23
  Speaker 3: Yeah, dealing with claims is hard, and.
• 14:26
  Speaker 2: You know, I'm glad they have you, though, I just
• 14:28
  Speaker 2: know that you're the best person in those situations. Like,
• 14:31
  Speaker 2: if I've got something going wrong, you are one of
• 14:33
  Speaker 2: the first people that I pick up the phone and go,
• 14:35
  Speaker 2: that's all falling apart. Phil, I feel like you've got
• 14:37
  Speaker 2: your shit together in the best possible way.
• 14:39
  Speaker 3: Yeah, And it's like and it is. I mean, look,
• 14:41
  Speaker 3: it's emotionally taxing and it's difficult. You know, we're not
• 14:44
  Speaker 3: going through it, but we're empathizing with our clients and
• 14:46
  Speaker 3: walking through that process. But this phone call, this client
• 14:50
  Speaker 3: and like incredibly positive, like had such an amazing outlook
• 14:54
  Speaker 3: on her situation. But was talking to her last week
• 14:57
  Speaker 3: and she's like, oh, yeah, we canceled our trauma insurance
• 15:00
  Speaker 3: two years ago. And I was like, and fortunately she
• 15:04
  Speaker 3: had income protection that pays her. It's an old policy
• 15:06
  Speaker 3: that pays her six months of income protection just on
• 15:09
  Speaker 3: a cancer diagnosis, so there is something. And she was
• 15:12
  Speaker 3: just like, look, at least it's something. You know, my
• 15:15
  Speaker 3: sister's over from the UK, so that'll cover flights, that'll
• 15:18
  Speaker 3: cover you know, go towards something. And this was like
• 15:20
  Speaker 3: sixty thousand dollars that was going to be paid out,
• 15:23
  Speaker 3: and in her mind it was like, at least that's
• 15:25
  Speaker 3: something towards it. And so you know, when people are
• 15:28
  Speaker 3: setting up the policy, they tell me that they've got
• 15:31
  Speaker 3: private health insurance. That's totally fine. When they go to claim,
• 15:34
  Speaker 3: it's rarely like a private health insurance is fine. It's
• 15:38
  Speaker 3: people's commentary is always, ah, that's great, the money is
• 15:41
  Speaker 3: in the bank account. Maybe it's probably not enough often
• 15:44
  Speaker 3: and so one bit of data that an insuran has
• 15:47
  Speaker 3: come out saying that they've talked about, what is this
• 15:50
  Speaker 3: total spend on health spending? Private health insurance covers half
• 15:54
  Speaker 3: the amount of spending than individuals are spending on medical events.
• 15:59
  Speaker 3: So what that means is the government spends a huge
• 16:02
  Speaker 3: amount and then personal spending is covered that covers more
• 16:08
  Speaker 3: than twice what private health is funding towards health events.
• 16:11
  Speaker 3: So when people say we've got private health insurance that
• 16:13
  Speaker 3: will cover it, well, it actually covers half of what
• 16:16
  Speaker 3: the total you know, spend on these health events is.
• 16:19
  Speaker 2: Yeah, And to get a little bit I don't know
• 16:21
  Speaker 2: if the word is morbid here, but like if you
• 16:24
  Speaker 2: get a cancer diagnosis and you're going through the private system, Like,
• 16:27
  Speaker 2: that's great because you can pick your doctor. You can
• 16:30
  Speaker 2: pick you know, your doctor can then pick the team
• 16:32
  Speaker 2: that works with them. In probably a more cushy environment.
• 16:36
  Speaker 2: You'll probably guaranteed your own hospital room. That's really nice.
• 16:40
  Speaker 2: But you might have thought, oh, if I go through
• 16:42
  Speaker 2: the public system, like, there'll be weights, they'll be this,
• 16:44
  Speaker 2: they'll be that. Like if you've got a dramatic cancer diagnosis,
• 16:48
  Speaker 2: you actually go to the front of the line in
• 16:50
  Speaker 2: the public system. That's why there are so many weights,
• 16:52
  Speaker 2: Like your ankle surgery is taking two years, it's because
• 16:55
  Speaker 2: the theaters are full of people with things that need
• 16:58
  Speaker 2: to happen this week or next month, or within the
• 17:00
  Speaker 2: next thirty days. And more often than not, if you
• 17:03
  Speaker 2: are diagnosed with a cancer that needs operation, your doctor
• 17:08
  Speaker 2: has to get that done within a certain time period.
• 17:11
  Speaker 2: For some people that's ten days, some people it's twenty,
• 17:14
  Speaker 2: some people it's thirty. You actually get flown through the
• 17:17
  Speaker 2: public system, and more often than not, the same doctors
• 17:20
  Speaker 2: actually work across both in the public system. No, you're
• 17:24
  Speaker 2: not guaranteed your own private room. You might get a
• 17:26
  Speaker 2: really good doctor that also works privately, but they might
• 17:29
  Speaker 2: not be able to pick their team.
• 17:30
  Speaker 3: That's fine.
• 17:31
  Speaker 2: There's so many like little nuances, But like what happens
• 17:34
  Speaker 2: when you get out of hospital, Like you can't go
• 17:36
  Speaker 2: back to work because you've got twelve weeks of recovery.
• 17:38
  Speaker 2: You can't go back to work because you literally have
• 17:41
  Speaker 2: PTSD and you're exhausted from all the chemo drugs, and
• 17:44
  Speaker 2: like you would really love the financial freedom for your
• 17:47
  Speaker 2: husband to stay home for a few weeks and just
• 17:49
  Speaker 2: like decompress from the situation that was, Like, these are
• 17:53
  Speaker 2: the things that I want you to be thinking about,
• 17:55
  Speaker 2: not just oh yeah, public versa. I'm fine, Like I
• 17:58
  Speaker 2: get that. And it is such a privilege to look
• 18:01
  Speaker 2: at public versus private in that way because you don't
• 18:03
  Speaker 2: get to see the like dramatic nature of what private
• 18:06
  Speaker 2: and public can actually look like when push comes to shove.
• 18:10
  Speaker 2: And for me, it's actually, well what happens next, Like,
• 18:13
  Speaker 2: say you get diagnosed with breast cancer and you've got
• 18:16
  Speaker 2: you know, a few rounds of chemo and then you
• 18:18
  Speaker 2: go into remission, and that's fantastic. Your body more often
• 18:22
  Speaker 2: than not is compromised. I very much doubt after having
• 18:26
  Speaker 2: this whole diagnosis happen, you return to work in a
• 18:29
  Speaker 2: full time capacity, Like you do not have to do
• 18:33
  Speaker 2: that if you have proper insurances to make sure that
• 18:36
  Speaker 2: you can return hopefully, because like you might be like
• 18:38
  Speaker 2: me and you're like chomping at the bit to get
• 18:40
  Speaker 2: back to work, but like you also need to protect
• 18:43
  Speaker 2: you and you can't do that if you're stressed about money.
• 18:46
  Speaker 3: And that's right, And private health insurance covers a lot
• 18:48
  Speaker 3: of bills. Oh yeah, it doesn't cover money in the
• 18:52
  Speaker 3: bank to give you space. That's really what personal insurance
• 18:55
  Speaker 3: cover does. It just gives you breathing space. And you know,
• 18:58
  Speaker 3: we help a lot of clients going through this claims process.
• 19:01
  Speaker 3: And that's the biggest thing is when money hits the
• 19:03
  Speaker 3: bank account, you can just you can just feel the
• 19:05
  Speaker 3: sigh of relief that people have is just going, oh,
• 19:09
  Speaker 3: we've got breathing room. Now, we've got capacity to make decisions.
• 19:14
  Speaker 3: And yes, insurance premiums cost money, and we've got to
• 19:16
  Speaker 3: pay it on the hope that we never actually get
• 19:19
  Speaker 3: that money.
• 19:19
  Speaker 2: They want it. Like I used to say this to
• 19:21
  Speaker 2: my advice clients, so'd be like, I actually would love
• 19:23
  Speaker 2: this to be the biggest waste of money in the
• 19:25
  Speaker 2: entire world. Like I hope that when you're sixty five,
• 19:28
  Speaker 2: you and I get to sit down and I'm still
• 19:29
  Speaker 2: your advisor, and you tell me, I wish I never
• 19:33
  Speaker 2: got insurance so I didn't get to claim on it.
• 19:35
  Speaker 2: And you know what, I'm going to say, good because
• 19:37
  Speaker 2: it means you never experience a significant health event. Wouldn't
• 19:40
  Speaker 2: that be a privilege?
• 19:41
  Speaker 3: And all insurance is really you know, we all look
• 19:45
  Speaker 3: at insurances as bad, like the insurance companies are bad
• 19:48
  Speaker 3: and we're good, But really, insurance at its core is
• 19:51
  Speaker 3: about a community coming together putting money into a big
• 19:54
  Speaker 3: bank account. When one of us unfortunately need it, they
• 19:57
  Speaker 3: can pull the money out. So we all feel like
• 19:58
  Speaker 3: insurance is a waste of money. Me feel like insurance
• 20:00
  Speaker 3: is a waste of money.
• 20:01
  Speaker 2: Good because I'm paying for somebody else's of mind.
• 20:05
  Speaker 3: Yeah, we work with clients who are claiming and they
• 20:07
  Speaker 3: get significantly more money in return than they've ever paid.
• 20:11
  Speaker 3: And that's because we've all come together as a community
• 20:14
  Speaker 3: and said, let's put money into this bank account. And
• 20:16
  Speaker 3: that's really why. I mean, they're for profit businesses insurance,
• 20:20
  Speaker 3: so it's we're not talking about pure altruism. But as
• 20:23
  Speaker 3: a policy holder, me, I know other people are claiming
• 20:28
  Speaker 3: on it because they need it at their worst moment.
• 20:31
  Speaker 3: Like we all know someone who's had a cancer scare.
• 20:35
  Speaker 3: You cannot walk around Australia without knowing someone who has
• 20:38
  Speaker 3: gone through cancer, Uncle, Auntie's brother, sister, whatever it is.
• 20:43
  Speaker 3: We all know someone and having personal insurance cover is
• 20:46
  Speaker 3: just allow us for breathing space. And as I said,
• 20:50
  Speaker 3: it is the most kind of emotionally taxing part of
• 20:52
  Speaker 3: our business, but the most rewarding part is working with
• 20:55
  Speaker 3: clients going through a claim and just the sigh of
• 20:58
  Speaker 3: relief that they have knowing that there's money there.
• 21:01
  Speaker 2: Yeah, yeah, that is so true. Let's pivot a little
• 21:05
  Speaker 2: bit because I want to continue on the divisive topic.
• 21:08
  Speaker 3: Let's go let's get I.
• 21:09
  Speaker 2: Want your opinions on another relatively topical insurance, and that's
• 21:13
  Speaker 2: funeral insurance. How do you feel about that?
• 21:16
  Speaker 3: I can't. I can't stand it neither.
• 21:19
  Speaker 2: I was like, hold on, is he going to go
• 21:21
  Speaker 2: oh if it gives you peace of mind?
• 21:24
  Speaker 3: Like I just think it is trash, No think, I
• 21:26
  Speaker 3: think it's a waste of money. Like it's really not
• 21:30
  Speaker 3: so much an insurance policy because people who are buying
• 21:33
  Speaker 3: it are often you know, getting closer to their funeral
• 21:36
  Speaker 3: and it's really pre paying a funeral.
• 21:38
  Speaker 2: Did you know? So this is like a side note.
• 21:40
  Speaker 2: I'm currently helping some people with their retirement plans, and
• 21:44
  Speaker 2: I was like looking on the money Smart website and like,
• 21:47
  Speaker 2: the cap of assets that you can own before you
• 21:52
  Speaker 2: start to have your pension influenced is about four hundred
• 21:55
  Speaker 2: and seventy thousand dollars. And one of the recommendations that
• 21:59
  Speaker 2: the literal government website.
• 22:01
  Speaker 3: Says is your funeral bond.
• 22:03
  Speaker 2: Yeah, is this a joke?
• 22:05
  Speaker 3: Like is that?
• 22:06
  Speaker 2: I was reading that and I was like, surely I'm
• 22:08
  Speaker 2: on the wrong website. I'm a smart money smart is
• 22:12
  Speaker 2: recommending that, Like, oh, if you're over the limit and
• 22:15
  Speaker 2: you're like trying to decrease your assets like maybe a
• 22:17
  Speaker 2: funeral bond, I would actually prefer you to gamble it away,
• 22:23
  Speaker 2: do you know what I mean? Like I was just
• 22:25
  Speaker 2: looking at it, going what what like, Phil.
• 22:28
  Speaker 3: Yeah, I wouldn't say it's a prodent financial strategy getting
• 22:31
  Speaker 3: a funeral bond to us your assets.
• 22:34
  Speaker 2: I was shook. And then I did a little bit
• 22:36
  Speaker 2: more research in preparation for this episode, and once you
• 22:39
  Speaker 2: move over to the ASSEIC website, it says that the
• 22:42
  Speaker 2: average funeral payout is about eight and a half thousand dollars,
• 22:46
  Speaker 2: but many policyholders end up actually paying more than double
• 22:50
  Speaker 2: of that in premiums because we're all living longer, and
• 22:55
  Speaker 2: essentially so many people take out that cover at a
• 22:58
  Speaker 2: young age. Like and if you're retiring and you're on
• 23:01
  Speaker 2: the money Smart website and you're like, oh, I actually
• 23:03
  Speaker 2: have just over the threshold of usets. I'm going to
• 23:05
  Speaker 2: buy this insurance bond and keep tipping money into it.
• 23:08
  Speaker 2: And I am literally only sixty five because I'm retiring
• 23:11
  Speaker 2: right now, but you live another thirty years, which is
• 23:14
  Speaker 2: very probable in this day and eight. Like what that
• 23:17
  Speaker 2: is actually unhinged to me? Like, there are so many
• 23:20
  Speaker 2: cases online of people who are paying twenty thirty thousand
• 23:23
  Speaker 2: dollars in premiums. What is this to me? Scam? Yes, yes,
• 23:29
  Speaker 2: you get paid out when you die, but it is
• 23:31
  Speaker 2: not worth it.
• 23:31
  Speaker 3: Oh yeah, I mean I wouldn't recommend it. And I
• 23:34
  Speaker 3: was actually talking to my mother in law the other day,
• 23:36
  Speaker 3: Please tell me day I have it. No, no, no,
• 23:38
  Speaker 3: she was talking about her mum. They always thought she
• 23:40
  Speaker 3: had funeral insurance, but then when they got there, they
• 23:43
  Speaker 3: couldn't find any paperwork.
• 23:44
  Speaker 2: I was about to say, how many people have actually
• 23:47
  Speaker 2: documented their funeral insurance properly enough so that when something happens,
• 23:51
  Speaker 2: the kids are like, oh great, Like we have to organize.
• 23:54
  Speaker 2: Like what if you went and got it because you
• 23:56
  Speaker 2: thought it was a good decision, but you don't talk
• 23:57
  Speaker 2: about money with your family.
• 23:58
  Speaker 3: Yes, exactly. And something that's interesting if you're an insurance
• 24:05
  Speaker 3: geek like myself, I'm post to all their stats, all
• 24:08
  Speaker 3: their data they post. Actually I'm not sure they still
• 24:11
  Speaker 3: post the revenue per insurance product. But you used to
• 24:14
  Speaker 3: be able to look at appra's data and they show
• 24:16
  Speaker 3: you how many premiums and how much is being paid
• 24:19
  Speaker 3: out on a per insurance policy basis, and so you
• 24:22
  Speaker 3: can actually see what percentage of premiums are going towards
• 24:25
  Speaker 3: claims and funeral insurance. The premium to claim ratio is
• 24:29
  Speaker 3: so low that it just means it's not a good bet.
• 24:32
  Speaker 2: No do it.
• 24:33
  Speaker 3: Absolutely, you're paying you know, as you said, you're paying
• 24:35
  Speaker 3: more than you're ever going to receive.
• 24:36
  Speaker 2: It drives me insane because if you look at the
• 24:38
  Speaker 2: marketing of these companies, they're all like, oh, well, actually
• 24:42
  Speaker 2: you're not leaving your loved ones with a financial burden
• 24:47
  Speaker 2: expensive please don't get me wrong. Like the average funeral
• 24:50
  Speaker 2: I think is between five and ten thousand dollars these days.
• 24:53
  Speaker 2: But if you're putting that money into a savings account
• 24:57
  Speaker 2: and something happens to you and your family access to
• 25:00
  Speaker 2: your funds, great, they can actually spend it in line
• 25:04
  Speaker 2: with how they think they want your funeral to be planned,
• 25:06
  Speaker 2: or maybe even how you want your funeral to be planned,
• 25:08
  Speaker 2: because you can do that, and they might even have
• 25:11
  Speaker 2: some extra money left over for a really good wake,
• 25:14
  Speaker 2: like whereas a funeral plan is not paying for that.
• 25:17
  Speaker 2: That is not how that's going to work. And like
• 25:19
  Speaker 2: a financial burden on your family or that is playing
• 25:23
  Speaker 2: into people's emotions, and I just think it's like so manipulative.
• 25:27
  Speaker 3: Yeah, and this is where it all comes down to.
• 25:30
  Speaker 3: At the end of the day, we've all got living expenses,
• 25:32
  Speaker 3: got to spend money. It's just allocating how much you
• 25:34
  Speaker 3: want to spend towards insurance is what needs to be
• 25:37
  Speaker 3: really thoughtful and just thinking about what's the alternative. And
• 25:41
  Speaker 3: so yeah, my view is I don't love funeral insurance
• 25:44
  Speaker 3: at all.
• 25:44
  Speaker 2: All Right, funeral insurance is out I reckon we should
• 25:46
  Speaker 2: go to a little bit of a break because we've
• 25:48
  Speaker 2: talked about some controversial insurances and I'm sure people actually
• 25:51
  Speaker 2: would love to hear from a proper financial advisor, some
• 25:54
  Speaker 2: actual advice, Like all right, well he told he does
• 25:57
  Speaker 2: what he doesn't like, what does he like? So because
• 26:00
  Speaker 2: we know that some of them are trash and some
• 26:02
  Speaker 2: of them are actually not as bad as we thought,
• 26:04
  Speaker 2: we're going to go to a really quick breakin. And
• 26:06
  Speaker 2: on the flip side, I'm going to put the pressure
• 26:07
  Speaker 2: on Phil to actually share the insurances he believes are
• 26:10
  Speaker 2: absolutely non negotiables, the stuff that could seriously save you
• 26:14
  Speaker 2: when things don't go to plan. So stay with us,
• 26:16
  Speaker 2: we will be right back. All right, welcome back. And
• 26:22
  Speaker 2: we have talked about what we think is trash and
• 26:24
  Speaker 2: what we think is maybe worth your cash. Phil, it's
• 26:28
  Speaker 2: time for I would say the important stuff, like instead
• 26:31
  Speaker 2: of just talking trash on insurance that we don't think
• 26:33
  Speaker 2: is worth it, like maybe pair insurance and definitely funeral insurance.
• 26:38
  Speaker 2: What insurances do you think every single person should have
• 26:42
  Speaker 2: locked in?
• 26:42
  Speaker 3: No matter what I mean, personal insurance is the most
• 26:45
  Speaker 3: important thing. So what is personal insurance? Is really four
• 26:48
  Speaker 3: to five different types of cover. So income protection, as
• 26:51
  Speaker 3: you said at the start, if you had to cancel
• 26:52
  Speaker 3: everything else but keep one, income protection is the one,
• 26:55
  Speaker 3: and so that protects your income if you can't work
• 26:57
  Speaker 3: because of an illness, injury, sickness, if you get made
• 27:00
  Speaker 3: redundant or you you know, you get fired. It's not
• 27:05
  Speaker 3: paying you that, but it's for health reasons. If you
• 27:07
  Speaker 3: can't work, you'll get paid and income. So that's a
• 27:10
  Speaker 3: part of personal insurance. Then there's life insurance, so VD
• 27:13
  Speaker 3: if you pass away, there's pretty simple. That's the one.
• 27:15
  Speaker 2: I think most people understand.
• 27:17
  Speaker 3: If it's easy. You're dead, you're dead, You're dead.
• 27:19
  Speaker 2: Yeah. Saying that, I was like, there's a little bit
• 27:22
  Speaker 2: of flexibilities. You have a terminal diagnosis, you might be
• 27:25
  Speaker 2: able to cash in on that a little bit early.
• 27:27
  Speaker 3: Correct and you know, I, you know, I think we've
• 27:30
  Speaker 3: spoken about this. One of my really close friends was
• 27:32
  Speaker 3: termally ill and it was super important for him to
• 27:35
  Speaker 3: get the claim in his bank account before he passed away.
• 27:37
  Speaker 3: And it was pancreatic cancer and it was like twelve
• 27:40
  Speaker 3: months before he was diagnosed before he parted, and it
• 27:42
  Speaker 3: was so iced up.
• 27:44
  Speaker 2: And so how's his family now?
• 27:46
  Speaker 3: Yeah, they're doing they're doing it. I mean still, they're
• 27:48
  Speaker 3: two young boys. They're just starting high school next year.
• 27:51
  Speaker 2: You spoke about him, he hadn't passed away yet, you
• 27:53
  Speaker 2: spoke about him last time you were on or the
• 27:56
  Speaker 2: time before you were on the podcast, And so the.
• 27:58
  Speaker 3: Terminal illness payment, it didn't change whether he got it
• 28:01
  Speaker 3: after he passed away or not. It's the same money. Yeah,
• 28:04
  Speaker 3: So but for him it was so important to know that.
• 28:06
  Speaker 2: It actually happened.
• 28:07
  Speaker 3: I had I set this up to protect my family.
• 28:11
  Speaker 3: I know the money's in the bank account and my
• 28:13
  Speaker 3: family is protected. Was incredibly important to him. So, yes,
• 28:16
  Speaker 3: there is nuances and a bit of an asterisk about
• 28:19
  Speaker 3: life insurance. The other one is like disability cover. Disability
• 28:23
  Speaker 3: cover is a lumps on payment, and that's the lowest
• 28:26
  Speaker 3: likely event to happen. You know, to be totally and
• 28:29
  Speaker 3: permanently disabled is really unlikely to happen. You're more likely
• 28:32
  Speaker 3: to pass away than to be totally We.
• 28:34
  Speaker 2: Had Rihannon on the podcast a while ago, and she
• 28:37
  Speaker 2: shared her story of diving into a pool at twenty
• 28:39
  Speaker 2: one in Bali and becoming a quadriplegic, and like, you
• 28:44
  Speaker 2: don't expect that stuff to happen. But like she shared
• 28:47
  Speaker 2: even just how much it cost her on an annual
• 28:49
  Speaker 2: basis to pee because she can't do that. And like
• 28:53
  Speaker 2: I think that these are the things that no one
• 28:55
  Speaker 2: really wants to talk about because it's a bit icky.
• 28:57
  Speaker 2: But the fact that she's spending I think it was
• 28:59
  Speaker 2: nearly eighty thousand dollars a year on catheters, Like, where's
• 29:03
  Speaker 2: that money coming from? Phil If you're not working and
• 29:05
  Speaker 2: you're not able.
• 29:06
  Speaker 3: To Yeah, and look, some of the answer is ndis, Oh,
• 29:09
  Speaker 3: I have an scheme, and that's great, but that can
• 29:12
  Speaker 3: change with governments.
• 29:13
  Speaker 2: And also that is going to be so limited in
• 29:16
  Speaker 2: terms of quality of life. Yes, you might get your catheters,
• 29:19
  Speaker 2: are you able to make the appropriate adjustments to your
• 29:23
  Speaker 2: home so you've got the right ramps and your comfy
• 29:25
  Speaker 2: getting in and out of your car? Like the ndis
• 29:28
  Speaker 2: often don't cover all of the things that are about
• 29:31
  Speaker 2: quality of life, but more about just getting by.
• 29:33
  Speaker 3: And the winds can change. That's the scariest bit about
• 29:36
  Speaker 3: an NIS scheme. You know, governments can they can be
• 29:40
  Speaker 3: cost blowouts and then they can rain those costs back in.
• 29:42
  Speaker 3: And what is raining costs back in from a government
• 29:44
  Speaker 3: point of view is we're not going to give as
• 29:46
  Speaker 3: much to people who need it yea, And so you know,
• 29:49
  Speaker 3: being reliant solely on that is a risk. So disability
• 29:53
  Speaker 3: is the least likely to happen, but the most financial impact,
• 29:55
  Speaker 3: like it's really significant. Then the trauma insurance or critical illness,
• 29:59
  Speaker 3: which pays for specific medical events, so cancers, hard attack strokes,
• 30:03
  Speaker 3: if any of those diagnosed or happen to you and
• 30:07
  Speaker 3: a specific severity, then there's a lum some payment that
• 30:09
  Speaker 3: gets paid out. That's the most one that we help
• 30:11
  Speaker 3: our clients claim on because it's the most likely to happen.
• 30:14
  Speaker 3: And there is child's covered that we like we recommend
• 30:17
  Speaker 3: for our clients is if something significant happens to your kids,
• 30:21
  Speaker 3: there's money in the bank, gives you breathing space. That's
• 30:24
  Speaker 3: really what these insurance policies are. So when we talk
• 30:26
  Speaker 3: about our priorities for me and yes, that's what we do,
• 30:30
  Speaker 3: and that's our business model is to help people set
• 30:32
  Speaker 3: this up. But the reason I can do anything in
• 30:34
  Speaker 3: financial advice, I can help people. I can be you know,
• 30:37
  Speaker 3: a finance bro and help people invest. But we've chosen
• 30:40
  Speaker 3: to work in insurance because fundamentally believe that personal insurance
• 30:44
  Speaker 3: is incredibly important. So if you're and I love that,
• 30:46
  Speaker 3: I love that.
• 30:47
  Speaker 2: I remember when you were telling me that you were
• 30:49
  Speaker 2: going to start sky Welt and you were do you
• 30:50
  Speaker 2: reckon it's a good name. I was like, yeah, it's great,
• 30:53
  Speaker 2: like and you were so like, I don't know if
• 30:54
  Speaker 2: it works, but I'll give it a crack, like I reckon,
• 30:56
  Speaker 2: I'll just do insurances. And like at the time, like
• 31:00
  Speaker 2: I thought it was a really good idea because it
• 31:02
  Speaker 2: was like a good business model. But I can almost
• 31:05
  Speaker 2: imagine every single other advisor being like, what is he doing?
• 31:09
  Speaker 2: Is he crazy? Like he's not going to do investment,
• 31:11
  Speaker 2: He's not going to do subranuation, he's not going to
• 31:14
  Speaker 2: do budget and cash flow. This guy is just going
• 31:16
  Speaker 2: to do insurance, which for a lot of advisors I
• 31:19
  Speaker 2: would say is a hygiene factor in the nicest possible way.
• 31:23
  Speaker 2: A lot of advisors who do investment or they really
• 31:26
  Speaker 2: focus on budget and cash flow or pensions or whatever,
• 31:29
  Speaker 2: they kind of like do insurance and they know it's important,
• 31:33
  Speaker 2: but it's not their favorite thing to do. Because he
• 31:35
  Speaker 2: is quite admin heavy, and there's a lot of back
• 31:37
  Speaker 2: and forth with insurance companies, and it can kind of,
• 31:39
  Speaker 2: like low key, be the bang of your existence as
• 31:41
  Speaker 2: an advisor if you're just so passionate about investing and like,
• 31:45
  Speaker 2: that was lou key me. When I was an advisor,
• 31:47
  Speaker 2: I was like, no, this is incredibly important. But nobody
• 31:50
  Speaker 2: liked negotiating with the bdms. No one wants to go
• 31:53
  Speaker 2: back and forth with the underwriter and be like, look,
• 31:56
  Speaker 2: I know that's on their record, but they've recovered, Like
• 31:59
  Speaker 2: and I would negotiate all the time. It would take hours.
• 32:02
  Speaker 2: So I remember thinking that you were low key, a
• 32:04
  Speaker 2: little bit crazy, but also it was genius because financial
• 32:08
  Speaker 2: advice can be so unobtainable. So like financial advice when
• 32:12
  Speaker 2: I was working as an advisor, which i'm not now,
• 32:15
  Speaker 2: was anywhere between four and a half thousand dollars and
• 32:17
  Speaker 2: ten thousand dollars for my initial statement of advice. For
• 32:20
  Speaker 2: most people, that is not reasonable. And it's not because
• 32:23
  Speaker 2: I didn't want it to be reasonable. It's because that's
• 32:26
  Speaker 2: what it costs to get the advice together, to be
• 32:29
  Speaker 2: able to create the statement of advice, to pay my team,
• 32:31
  Speaker 2: to keep the lights on in my office, to pay
• 32:32
  Speaker 2: for my license to do all of those things. Phil,
• 32:35
  Speaker 2: I know this sounds really marketing, but like, because you
• 32:39
  Speaker 2: only do insurance. If I am listening to this and
• 32:42
  Speaker 2: I'm like, I can't afford to go see a financial advisor,
• 32:46
  Speaker 2: how much does as Skywealth's statement of advice cost for
• 32:48
  Speaker 2: a single and then maybe for a couple.
• 32:50
  Speaker 3: Yeah, So we've changed up our models slightly. So if
• 32:53
  Speaker 3: you are like just employed and don't have any major complexities,
• 32:58
  Speaker 3: then we charge three hundred and thirty dollars for an individual.
• 33:00
  Speaker 2: Three hundred and thirty bucks to get your advice done
• 33:03
  Speaker 2: just for insured.
• 33:03
  Speaker 3: That is, that's it. And we only do insurance. So
• 33:06
  Speaker 3: if someone says they've got an austrailed super but they're
• 33:08
  Speaker 3: looking at host plus cool, sorry, and we will we
• 33:11
  Speaker 3: will say hold just hold your horses. We'll look at
• 33:13
  Speaker 3: any insurance within a strained super. But we're not going
• 33:16
  Speaker 3: to tell you to go and invest your money here
• 33:18
  Speaker 3: or change your acid allocation. So it is very scoped advising.
• 33:23
  Speaker 3: The jargon that we use in I think it's.
• 33:25
  Speaker 2: Good because you could go to another advisor. And I
• 33:28
  Speaker 2: think this is why, like you and I get on
• 33:30
  Speaker 2: like a house on fire, but we also get on
• 33:32
  Speaker 2: on like a more altruistic level because if you go
• 33:35
  Speaker 2: and see another financial advisor for insurance only advice, I
• 33:39
  Speaker 2: would say minimum two thousand dollars because they honestly they
• 33:42
  Speaker 2: don't have the model to support going and just doing
• 33:46
  Speaker 2: insurance for a client. And they also kind of want
• 33:48
  Speaker 2: you to be a little bit scared away from that
• 33:49
  Speaker 2: because they don't want to do that.
• 33:51
  Speaker 3: Yeah, that's right, brutally on us.
• 33:53
  Speaker 2: Most advisors are like insurance only clients, no, thank you.
• 33:56
  Speaker 3: Yeah, And to be fair, we work with a lot
• 33:58
  Speaker 3: of those firms because they prefer to us, which is genius.
• 34:01
  Speaker 2: You're like, I'll just do their insurances and sample them
• 34:03
  Speaker 2: back to you.
• 34:04
  Speaker 3: Yeah, because I mean I've finished talking about our fees. Sorry,
• 34:07
  Speaker 3: just to touch on that, Like, let's be honest. Investments
• 34:10
  Speaker 3: is fun investments. This money magically increases.
• 34:15
  Speaker 2: Yeah, I have a whole investment masterclass, Like I'm obsessed
• 34:19
  Speaker 2: through that. Do you think because it magically increases this thing,
• 34:22
  Speaker 2: this asset interesting? How good is that?
• 34:25
  Speaker 3: And what we do is we help people pay money
• 34:27
  Speaker 3: to an insurance company or get paid from an insurance company.
• 34:30
  Speaker 2: I'm not gonna lie. That doesn't sounds as sexy as sexy.
• 34:34
  Speaker 3: So that's why I start doing it. Yeah, So just
• 34:38
  Speaker 3: back to our fees, So three point thirty if you're
• 34:39
  Speaker 3: an individual and you're just payg so you just employed
• 34:43
  Speaker 3: and for a couple of four hundred ninety five dollars. Now,
• 34:46
  Speaker 3: if someone is self employed, if they've got like defined benefits,
• 34:49
  Speaker 3: self managed super funny. More if they're an expat so
• 34:53
  Speaker 3: we help people who are living abroad get set up
• 34:55
  Speaker 3: insurance policies in Australia, any one of those four things,
• 34:59
  Speaker 3: then it's a little bit more expensive. So seven hundred
• 35:01
  Speaker 3: and seventy dollars for individuals, yeah.
• 35:02
  Speaker 2: Because you're a lance. Hundred is actually a little bit
• 35:04
  Speaker 2: more complex.
• 35:05
  Speaker 3: Yeah, and looking through profit and loss statements, it just
• 35:08
  Speaker 3: sounds easy, especially if you just got to like, if
• 35:12
  Speaker 3: you're not a simple business, it's still not because the
• 35:16
  Speaker 3: insurance that we can get is so much more complex.
• 35:18
  Speaker 3: So yeah, more complex clients have slightly high seve.
• 35:21
  Speaker 2: It sounds like I'm I don't know, the biggest fan
• 35:23
  Speaker 2: of Sky Wealth, but I literally am. Like people actually
• 35:25
  Speaker 2: message us on a weekly basis and they'll be like, hey,
• 35:28
  Speaker 2: who was that insurance dude that you mentioned on the podcast,
• 35:31
  Speaker 2: And I'm like, it would definitely have been Sky like
• 35:33
  Speaker 2: it definitely was, Phil, Like, I just am such a
• 35:36
  Speaker 2: fan of it because it's I guess from the flip side.
• 35:40
  Speaker 2: And we talked about this before. Having been an advisor,
• 35:42
  Speaker 2: I've seen how bad it can be, and it gives
• 35:45
  Speaker 2: me so much anxiety to think that my community aren't
• 35:48
  Speaker 2: protected or maybe they don't see the value in getting protected.
• 35:51
  Speaker 2: And like we live in Australia and we are so
• 35:54
  Speaker 2: lucky we have many care like and at the moment
• 35:57
  Speaker 2: we're seeing all of this stuff happening internationally, like making
• 36:00
  Speaker 2: decisions left right in the center. I saw TikTok the
• 36:03
  Speaker 2: other day, Phil, where this American mom was breaking down
• 36:07
  Speaker 2: her invoice for giving birth in an American hospital and
• 36:10
  Speaker 2: she was like, oh, it's so good because like this
• 36:12
  Speaker 2: is a good deal, and it was forty four thousand
• 36:15
  Speaker 2: dollars USD for her to give birth, and she was
• 36:18
  Speaker 2: going through like lin item by line item and the
• 36:21
  Speaker 2: comments were obviously, oh, my gosh, that's so good because
• 36:25
  Speaker 2: she had an American audience. Mine was sixty six thousand
• 36:28
  Speaker 2: and whatever. But then there were a few comments from
• 36:30
  Speaker 2: Australians being like, this is crazy to me because I
• 36:33
  Speaker 2: went through the public health system in Australia. I had
• 36:36
  Speaker 2: a C section, or I had a be.
• 36:38
  Speaker 3: Dur all, I had these daughters. We walked in, I stayed.
• 36:42
  Speaker 3: We had couples rooms, so I stayed over for three
• 36:46
  Speaker 3: little over the moment it was sleepover. We had. We
• 36:48
  Speaker 3: had a date night. I mean Kate, I loved, not
• 36:50
  Speaker 3: so much of a day night for her because she's
• 36:52
  Speaker 3: you had a good time.
• 36:53
  Speaker 2: She was along for the ride.
• 36:56
  Speaker 3: But you know, and then we walk out like are
• 36:58
  Speaker 3: we good to go have.
• 37:00
  Speaker 2: A good day, enjoy your new baby. It didn't Because
• 37:03
  Speaker 2: we live in Australia and we see these things and
• 37:06
  Speaker 2: we are so lucky to have these things. I think
• 37:08
  Speaker 2: there's an underlying assumption that when things go wrong, we
• 37:12
  Speaker 2: are looked after. And we are known globally as the
• 37:16
  Speaker 2: most underinsured country in the world, the most insured country
• 37:20
  Speaker 2: in the world. Feel you probably already know this is
• 37:23
  Speaker 2: who Oh he doesn't know this. It's South Africa. Oh yes, okay,
• 37:27
  Speaker 2: South Africa. They are the most insured country in the world.
• 37:30
  Speaker 2: And then we are the most underinsured country.
• 37:32
  Speaker 3: You know, Trauma insurance was invented in South Africa.
• 37:35
  Speaker 2: It was it was I remember going to all these
• 37:38
  Speaker 2: conferences and like a lot of insurance companies actually based
• 37:41
  Speaker 2: in South Africa, and that makes sense because it turns
• 37:44
  Speaker 2: out there they love it. They love it like everybody
• 37:47
  Speaker 2: has insurance coming out of the kazoo over there, and
• 37:49
  Speaker 2: it's a.
• 37:50
  Speaker 3: Bit of a shoe. We're right attitude, that's the issue
• 37:53
  Speaker 3: and coming back like this is you know, we help
• 37:56
  Speaker 3: people set up bills. It's an increase to someone's last
• 37:59
  Speaker 3: style setting up insurance. Now, the great thing that we
• 38:03
  Speaker 3: have in Australia is your super fun can fund a
• 38:05
  Speaker 3: lot of the premiums and it can be really tax effective,
• 38:08
  Speaker 3: so it doesn't matter if you're with a strain and
• 38:10
  Speaker 3: super host plus wherever. We can set up the right
• 38:13
  Speaker 3: insurance policy with a company without using or really what
• 38:17
  Speaker 3: we think is best for their clients and whoever they're
• 38:21
  Speaker 3: with from a super point of view, that can fund
• 38:23
  Speaker 3: the premiums.
• 38:23
  Speaker 2: Yeah, and I love that because for those of you
• 38:25
  Speaker 2: following along at home, the superannuation environment is taxed at
• 38:28
  Speaker 2: fifteen percent instead of your marginal tax rate, which most
• 38:31
  Speaker 2: people listening to our podcast is probably going to be
• 38:34
  Speaker 2: around thirty percent, which is a fifteen percent discount money win, Phiel,
• 38:38
  Speaker 2: we lose that. That's very sexy.
• 38:40
  Speaker 3: Yeah, and you pay, especially life and disability, you pay
• 38:42
  Speaker 3: pre tax dollars for those premiums instead of paying it out.
• 38:46
  Speaker 3: Like if you've set up an insurance policy directly with
• 38:49
  Speaker 3: an insurance provider, you almost certainly not paying it through
• 38:52
  Speaker 3: SUPER because most of them don't allow it. And so
• 38:54
  Speaker 3: you're paying tax on your income to then pay these
• 38:56
  Speaker 3: premiums that aren't deductible. Why don't we just paid inside?
• 38:59
  Speaker 3: So we've got a lot of free kicks in Australia
• 39:01
  Speaker 3: when it comes to personal insurance cover the means it's
• 39:04
  Speaker 3: really advantageous to go and see a financial advisor because
• 39:08
  Speaker 3: we have choice of insurer regardless of what's SUPER fun
• 39:11
  Speaker 3: you with. Yeah, if you're with the strained Super, you
• 39:13
  Speaker 3: don't have to go to TAO, which is the insurer who.
• 39:17
  Speaker 1: Yeah.
• 39:17
  Speaker 2: I think that's one of my favorite parts about it.
• 39:19
  Speaker 2: I'm like, yes, it might impact your day to day
• 39:21
  Speaker 2: income or your cash flow. And I mean, Phil, this morning,
• 39:24
  Speaker 2: you and I got breakfast and we were talking about
• 39:27
  Speaker 2: the cost of living crisis, and we're talking about how
• 39:29
  Speaker 2: ridiculous groceries were in all of that stuff when we
• 39:31
  Speaker 2: are both in financially privileged positions. But we do still
• 39:34
  Speaker 2: see it, Like you're dealing with clients every day who
• 39:37
  Speaker 2: are probably like, okay, cool, Like, let me see how
• 39:40
  Speaker 2: I can fit that into the budget. Because we're not
• 39:43
  Speaker 2: just assuming that, you know, for income protection, it might
• 39:46
  Speaker 2: be one thousand dollars a year, like it might be
• 39:48
  Speaker 2: more than that depending on your income. We're not expecting
• 39:51
  Speaker 2: you to just be like, oh yeah, she'll be right.
• 39:53
  Speaker 2: But it is something that you genuinely should be prioritizing
• 39:57
  Speaker 2: because it's your livelihood, it's your income. It's like the
• 40:00
  Speaker 2: the most important asset that you need to protect. So,
• 40:03
  Speaker 2: knowing that I'm running out of time with you today,
• 40:05
  Speaker 2: I want to know, is there like a golden rule
• 40:08
  Speaker 2: for deciding if insurance is kind of worth it for
• 40:10
  Speaker 2: you or not?
• 40:11
  Speaker 3: The kind of analogy I love because we've got a
• 40:14
  Speaker 3: lot of young team members coming into our business. All
• 40:16
  Speaker 3: of them tell me I'm young, I don't need insurance,
• 40:19
  Speaker 3: and I get on my The ones that have been
• 40:23
  Speaker 3: around for a bit longer, and when a newer person comes,
• 40:26
  Speaker 3: they're just like, I'm going to fill up for this round.
• 40:29
  Speaker 3: Yeah yeah. So the thing I like to think about is,
• 40:31
  Speaker 3: take your income, whatever it is, big, small, doesn't matter.
• 40:34
  Speaker 3: Take your income. Work out how old you are, so
• 40:37
  Speaker 3: go age sixty five minus my current age, yeah, whatever
• 40:41
  Speaker 3: that may be. Go your income times that number. Yeah,
• 40:44
  Speaker 3: so how many years until retirement my current today income?
• 40:47
  Speaker 3: Assuming it's not going to increase, If it's a million dollars,
• 40:50
  Speaker 3: it could be three million dollars. That's without any increase,
• 40:53
  Speaker 3: without any promotions. And think about if I had a
• 40:55
  Speaker 3: Ferrari that cost me three million dollars and I was
• 40:58
  Speaker 3: driving it every single day. Would I say, I'm young,
• 41:02
  Speaker 3: I'm a good driver, I don't need to ensure it.
• 41:05
  Speaker 3: Or would I go, that's a three million dollar Ferrari.
• 41:08
  Speaker 3: If if that crashes or if there's an issue, even
• 41:11
  Speaker 3: too scared to drive it.
• 41:12
  Speaker 2: If it's on insurance, I wouldn't drive it at all.
• 41:15
  Speaker 2: Like if someone said, do you want to drive my Ferrari,
• 41:17
  Speaker 2: I'd first say no because I'm too scared to drive
• 41:19
  Speaker 2: your Ferrari. But second, the next question would be that
• 41:22
  Speaker 2: it's insured, right, Like if I crash your Ferrari? Like
• 41:26
  Speaker 2: are you coverage for this? You're good? You're good, But
• 41:29
  Speaker 2: you don't ask that when you go skydiving, do you?
• 41:31
  Speaker 3: Yeah? And that's what and we don't ask it every
• 41:33
  Speaker 3: time we go out to work, because like the biggest
• 41:37
  Speaker 3: claim at the moment and the biggest cost for insurance
• 41:39
  Speaker 3: is mental health. Yes, and mental health. We're in an
• 41:42
  Speaker 3: absolute epidemic for mental health conditions, and so that's the
• 41:46
  Speaker 3: thing of going we aren't you know, life is fragile.
• 41:51
  Speaker 3: You know there are things that can happen, and we
• 41:54
  Speaker 3: are driving around Ferraris in our bodies. Doesn't matter how
• 41:57
  Speaker 3: big or small air income is. If you're young, you're
• 42:00
  Speaker 3: driving around a Ferrari. Now insure that Ferrari. That's the
• 42:03
  Speaker 3: most important insurance. And that's why you know you've kicked
• 42:05
  Speaker 3: us off with saying income protection is most important. And
• 42:07
  Speaker 3: I fundamentally agree that that is.
• 42:09
  Speaker 2: I'm a on the same page because we could have
• 42:11
  Speaker 2: just made this whole episode a little argument like and
• 42:14
  Speaker 2: that wouldn't have been nearly as in life community. Yeah,
• 42:17
  Speaker 2: I mean that's fine, But like, I think that is
• 42:19
  Speaker 2: so important and I haven't thought about it in the
• 42:22
  Speaker 2: Ferrari analogy. I'm always like, you're insuring your car, but
• 42:25
  Speaker 2: you're definitely not insuring your life. Like I think you've
• 42:27
  Speaker 2: got it backwards. But like the idea that we're all
• 42:30
  Speaker 2: mini ferraris absolutely I love that for us we are expensive,
• 42:34
  Speaker 2: we are worth it.
• 42:34
  Speaker 3: Like, I didn't even know if Ferrari's at three million
• 42:36
  Speaker 3: dollars none, I don't know what. I personally never looked
• 42:38
  Speaker 3: into a Ferrari.
• 42:38
  Speaker 2: I haven't either, but that at the moment is the
• 42:42
  Speaker 2: most expensive car I can think of. Yeah, like, I
• 42:44
  Speaker 2: can't think of anything.
• 42:45
  Speaker 3: You know what.
• 42:45
  Speaker 2: There are people that are going to be screaming right
• 42:47
  Speaker 2: now in their cars, being like Victoria.
• 42:49
  Speaker 3: This, McLaren, this, this is mor guy.
• 42:53
  Speaker 2: Well, neither am I and I think that that's probably
• 42:56
  Speaker 2: a really good place to leave it. Phil. I need
• 42:58
  Speaker 2: to update my insurance so we might get onto that.
• 43:01
  Speaker 2: Thank you so much for coming on the show. It
• 43:03
  Speaker 2: is always a pleasure, And to be honest, I just
• 43:05
  Speaker 2: feel like you really do help make this stuff a
• 43:07
  Speaker 2: whole heapless, overwhelming.
• 43:11
  Speaker 3: Oh, thank for having me.
• 43:12
  Speaker 2: Thanks for having me.
• 43:12
  Speaker 3: Victoria, Hey, VD, thank you so much for having me.
• 43:17
  Speaker 3: You're not having that edited out.
• 43:19
  Speaker 2: One of the joys of.
• 43:20
  Speaker 3: My life is being able to spend Tommy. Actually, I
• 43:22
  Speaker 3: was singing this on the way in here. This will
• 43:24
  Speaker 3: get a lettered out, I'm sure. Is The older I get,
• 43:27
  Speaker 3: the more I appreciate long term relationships, so I appreciate you.
• 43:30
  Speaker 2: No, I'm not editing that out because it strokes my
• 43:32
  Speaker 2: ego in exactly the right way. I appreciate it. Guys,
• 43:35
  Speaker 2: if this episode has made you think twice about what
• 43:37
  Speaker 2: you're paying for or what you're not covered for, consider
• 43:40
  Speaker 2: this your reminder to do a little life admin check
• 43:42
  Speaker 2: in your future. Self is definitely going to thank you
• 43:45
  Speaker 2: for it, And if you haven't already, make sure that
• 43:47
  Speaker 2: you're following She's on the Money wherever you're listening right
• 43:49
  Speaker 2: now so you don't miss the next episode. All information
• 43:53
  Speaker 2: about our friend Phil and sky wealth is going to
• 43:55
  Speaker 2: be able to be found in our show notes, so
• 43:58
  Speaker 2: if you want to talk to this guy, you can
• 43:59
  Speaker 2: hit him up asap.
• 44:07
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• 44:09
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• 44:13
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• 44:17
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