Much of today’s reasons for not having adequate, or any, insurance is affordability. And it’s not surprising due to the ever growing mortgages, especially in the capital cities, which are not in line with the ever stagnant salaries.

Insurance is usually one of the first casualties to the harder times. I haven’t had too many people during this down turn, but I don’t believe we have seen the worst of it yet. There are still some hard times to come unfortunately. KRudd can keep on handing out freebies, but until the addresses the employers in this country, those who are employed will be in for a unsure time over the next 12 months. But I digress, that is for another post.

We all know that insurance is an important part of life, and to cut it out altogether leaves a certain risk. You can, however, afford to have insurance even without any money! No, insurers are not doing a KRudd and giving out policies, but there is a way to use other means to help your cashflow and still keep your cover in force. The simple answer is ‘Superannuation’.

Especially if you have several old supers from previous jobs, they can all be rolled together and the life or income insurance attached to the super. This way, what would normally be paid from your bank account, will now be paid from your superannuation account. Thanks to the government’s co-contribution scheme, if you earn less than $68,000 year and pay some of your own money into suoper, they will match your contribution 150%!

For example, if your insurance is $500 year, and you use the example above by putting it into super and pay $330 year into it. The government will pay $1.50 for each $1 you’ve paid = $500. By paying it through super, you save yourself $170 year. Obviously the more your premium, the more you save, but you get the picture.

There are many questions that come along with this subject: Wouldn’t that eat into my super?, Isn’t there rules for super not to pay out before retirement?, What if I only have my work super?, Can I pay into the super still?

All these questions are ligitimate, and I will cover them off in the next post on this subect. If you would like someone to talk to about making this a reality. Especially if affordability because of the financial crisis is taking place, please email me.

PD