Five Important Personal Insurance Considerations for Employee Lawyers under 40

03/08/2018

As a Young Lawyer with a bright career ahead of you, you are in a great position to make some smart decisions about your current and future protection arrangements.

1. Maximising your Tax deductions

Given you are likely paying some tax at or around the highest marginal tax rate, it’s important that you are maximising the tax deductibility of your personal insurance premiums.

Death/TPD premiums

By utilising the superannuation environment, you should be able to make your Death/TPD premiums tax deductible.  This can be done by either utilising a salary sacrifice strategy or changing the ownership of your insurance.  When compared to paying for these premiums personally, this can provide a saving equal to your highest marginal tax rate.

Income Protection

Income Protection premiums are deemed an expense incurred whilst earning an income thus making them tax deductible.

2. Level Premiums

Managing the cost of insurance as we get older is a big challenge.

Obtaining insurance at a young age on a level premium can provide you with massive savings over the long term and make premiums so much more affordable at an older age.

It is not uncommon for us to come across Senior Partners paying well over $30k per annum in personal insurance premiums because they didn’t make these proper arrangements at a younger age.

3. Preparing for becoming Partner

If your aspirations are to become Partner, your future financial world will change quite dramatically.  This will have significant impact and bearing on your personal insurances.  Getting your insurances in order now can be a very smart move.

– Your income will increase significantly.  It is important that your Income Protection policy will allow you to make changes easily and, in a cost, effective manner (True Level Premiums are important here).

– As a Partner, many firms will make it compulsory that you hold Income Protection and Death/TPD insurances.  Having these insurances in place now means that you can hold this insurance in a cost effective and comprehensive manner.

– Some firms will have Group Insurance policies that you can become a part of.  Generally speaking, these policies are low in quality and provide a lack of flexibility as your situation changes.

4. Getting covered while you’re still healthy

As we get older, things happen health wise.  It’s a fact of life.  Applying for insurance at an older age can be challenging.  Getting your insurances in order at a young age means that you can hold your insurance in the most comprehensive manner possible (without premium loadings and exclusions).  From the split second that any thing changes health wise, applying for insurance can become a challenge and potentially not even possible.

5. Product Selection

Insurance product selection is important.  Choosing a provider and product that offers generous and flexible policy wording at a good price should always be your objective.  Working with a specialist insurance adviser with extensive legal industry knowledge such as MCP Group will help you make smart product decisions that should serve you well long into your future.

MCP Lawyers Life is a specialist personal insurance advice business for Legal Practitioners, helping them make smart decisions about their personal and family protection arrangements including Life Insurance, Income Protection.

Contact LAWYER’S LIFE