Prosperity Partners

Redundancy: 5 tips to survive a redundancy

Coming from someone who has been retrenched three times, you get a feeling when it is going to happen. If you are called into a meeting at 7am in the middle of winter (when you normally start work at 8.30am) you just know something is not right! Or when Head Office are having lots of meetings and there seems to be some distances between you and your Senior Manager.

As an employee, you know the business very well, you are there every day, you often see what works, what doesn’t and you can sometimes sense when the business is struggling. It’s a shame, because I consider businesses like a human being, a member of the family, but sometimes even a human being has no choice but to detox…

As Financial Advisers we have seen people make some wise decisions about their redundancy, while others have made a mess of it.

So here are some tips based on personal experience and observation from clients over the years:

1) Once you have received your retrenchment payout, it is too late to try and re-finance. You may be paying too much in interest but banks will not approve an application for re-finance if you are not working. You need to look into this sooner rather than later. If you have left it too late, then speak to your lender and ask what options you have, maybe to go interest only for 6 months or a payment freeze for a few months….worth a few phone calls.

2) Give me $20,000 and I could have it spent within 3 hours… we don’t always get the chance to receive a large sum of money in our bank account and when we do, it is usually spent very quickly. Here is my suggestion, leave it in the bank account, take time out for at least 3 days, write a list of all of your debts (home loan, credit cards, etc) and all your bills for the next six months. Then work out a ‘smart’ strategy to make these funds work as hard as possible to your advantage. This time out allows your mind to relax, reflect and think outside the box. Even if you have to take a note pad, pen and find your favourite coffee shop. I once took a note book and the kids to an indoor playground centre. It can get noisy and the coffee is often less than good, but the kids were having fun while I worked through a ‘survival plan’. The obvious approach is to clear highest interest paying debts first, but think broader than that…see next tip…

3) You do not know how long it will be before you get work again…so it is all about Cash-flow Survival. Turn this negative event into a positive change, shut down any unnecessary expenses, request to pay the minimum off your loans and credit cards. You need to allow for the fact that you may be off work for 6 months. You may be able to re-structure your personal insurance so they are being debited from your superannuation instead of your bank account. You will be able to pay some bills in advance, like utilities and insurances, and then you won’t have to worry about these bills for at least 6 months.

4) Shutting down the expenses is only half the task. The next is to think outside the box to bring in income. ‘Show me the Money – Jerry’ as they say in the movie. Sure, you need to update your CV, but while you are applying for other work, what other options are possible? Can your partner go out to work or increase their hours? Can you pick up casual work elsewhere, maybe in a different field? Can you find someone who is rich, willing to spend the rest of their life with you….sorry, maybe that was just me? Once, I was retrenched in November and with Christmas fast approaching, my back was against the wall. So I advertised on Gumtree for anyone looking to fix, clean or tidy up their house before the ‘relatives come over at Xmas’. It worked. Any casual jobs around the house that needed doing, I would do them. I got quite a few jobs, from fixing retic, cleaning gutters, to re-staining the deck around the pool. Think outside the box here. Other people need odd jobs done and won’t have the time to do them, put yourself out-there and go hunting.

5) Seek advice early – there are factors that you will not have even thought of that a specialist will be able to help you with. Like Cash-flow management, should you place some of your retrenchment into superannuation, can you get access to your superannuation, can you get any Centrelink benefits, how should you manage your debts, should you look at selling some of your property, can you time the sale of certain assets to minimise any capital gains tax, should you cancel some of your insurances, are there cheaper options, the list goes on…. The feeling of having clarity around your choices is a good feeling, especially at a time when you are vulnerable.

So take your time, keep it together, think clearly and most importantly surround yourself with the right people.

We have financial advisers and a mortgage broker to assist our clients. We have room for a few more clients, so if you would like assistance, contact us. No obligation consultation and the first 30 minutes are on us… plus Noela makes a nice coffee.

Darren Joseph – Prosperity Partners
(08) 9442 0666
[email protected]

No point reading the fine print once you’re disabled…

We have always held a concern that many do not fully understand what they are covered for with their insurances. Whether it is paid from your Superannuation or direct from your bank account, you need to understand what you are paying for.

This is why we recommend reviews and compare the top 10 insurers in Australia.

Please have a read of a recent ASIC findings below. If you are unsure about what you are covered for, or would like us to review your insurances, please let us know and we will be happy to guide you.

Exert from the ASIC website:

ASIC issues industry review of life insurance claims

12 October 2016: ASIC today released its review of the life insurance sector's handling of claims. The review found that, while life insurers are paying the considerable majority of claims, there are significant shortcomings in a number of areas of life insurance claims handling, and there is a clear need for public reporting on life insurance claims outcomes – at an industry and individual insurer level.

'Life insurance is a vitally important financial product that helps support consumers and their families at times of significant stress. Not being able to successfully claim on a life insurance policy can be financially devastating for the consumer and/or their family, so it's important that the industry operates in a way that is fair and transparent,' said Peter Kell.

ASIC's review examined 15 insurers covering more than 90 per cent of the market. The six-month review analysed three years' of data on the four major life insurance policy types – term life cover, total and permanent disablement (TPD), trauma, and income protection. ASIC worked closely with APRA during the review.

ASIC sought to identify whether there were systemic issues across the industry, as well as concerns relating to particular products or firms. The review also assessed whether industry data indicated the need for further, more targeted surveillance work.

Findings
ASIC found that approximately 90% of claims are paid in the first instance with around $8.2billion in net policy payments made in the year ending 30 June 2016.
While not finding evidence of cross-industry misconduct, ASIC's review identified issues of concern in relation to higher claims denial rates and claims handling procedures associated with:
• particular types of policies: The rates of declined claims were highest for TPD cover (average declined claim rate of 16%) and trauma cover (average declined claim rate of 14%)
• a considerable variation in declined claims among insurers, with TPD denial rates being as high as 37% and trauma (up to 25%) for some types of cover
• the most common types of life insurance disputes were about the evidence insurers require when assessing claims (including surveillance), and delays in claims handling.

ASIC's review also found that there were higher claims denial rates in relation to insurance policies sold direct to consumers with no financial advice (compared to policies sold through advisers and group insurance policies).

ASIC has set out the actions to improve standards in life insurance claims handling.

ASIC will target the areas of concern we have identified from our review, applying targeted surveillances of particular insurers that have the highest decline rates and highest proportional dispute numbers, and examining TPD claims procedures and timeframes.

ASIC will also conduct a major review of the life insurance sold without personal advice (also known as 'direct' life insurance).

Background
In March 2016, the ABC Four Corners program and Fairfax Media publications jointly reported on a number of concerns about the life insurance claims handling practices of The Colonial Mutual Life Assurance Society Limited (trading as CommInsure).
ASIC is also undertaking a separate investigation into the activities of CommInsure, following allegations in media coverage. An update on that review is also released today.
In addition to our investigation of CommInsure, we undertook a review of claims handling practices across the life insurance industry. We reviewed data on claims from 15 insurers, estimated to make up over 90% of the life insurance market. The insurers included in this review are:
• AIA Australia Limited;
• Allianz Australia Life Insurance Limited;
• AMP Life Limited;
• Clearview Life Assurance Limited;
• Colonial Mutual Life Assurance Society Limited;
• Hannover Life Re of Australasia Ltd;
• Macquarie Life Limited;
• Metlife Insurance Ltd
• MLC Limited;
• OnePath Life Limited;
• St Andrew's Life Insurance Pty Ltd;
• Suncorp Life & Superannuation Limited;
• TAL Life Limited;
• Westpac Life Insurance Services Limited;
• Zurich Australia Limited.
We also conducted an analysis of claims-related disputes and reports of misconduct and undertook a targeted review of Product Disclosure Statements (PDSs) and policy documents to supplement the information provided by insurers.

Our review covered the three year period from 1 January 2013 to 31 December 2015, and assessed the four most common life insurance products:
• life cover (also known as 'term life cover' or 'death cover')
• total and permanent disablement (TPD)
• trauma, and
• income protection cover.
The review also assessed claims outcomes and trends by distribution channels, for the three main channels:
• group cover made available to members of superannuation funds, employees and members of master trusts (group policies)
• individual cover sold by financial advisers (retail policies), and
• individual cover sold directly by insurers or third parties (e.g. through a call centre or online) without advice (direct or non-advised policies).

Interesting and easy to understand article about Brexit. Hope you find it useful.

http://www.infocus.com.au/news/breaking-up-is-hard-to-do-brexit

“Breaking up is hard to do” – the Brexit | Infocus When Neil Sedaka had his 1962 hit “Breaking up is hard to do” it was only four years after the signing of the Treaty of Rome – from where the European Union (EU) was born. France strongly objected to Britain joining for many years which was the catalyst for many boys in secondary schools across Engl...