Guiding a client through a life-changing event
Introduction
This case study demonstrates the profound impact of strategic financial advice in providing security and stability for our client when she faced an unexpected and life-altering health event that forced her to cease working.
Background
When Sophie first approached Propel Wealth in 2020, she was looking for a comprehensive financial plan to consolidate her superannuation, manage her debt, and ensure she had a robust wealth protection strategy in place. Her goals were to achieve financial independence and build a secure future.
Initial Advice and Strategy
Our initial advice focused on building a strong financial foundation for Sophie. The key strategies we implemented were:
Superannuation Consolidation: We consolidated her multiple superannuation accounts into a single, cost-effective account. This simplified her financial affairs and reduced unnecessary fees.
Wealth Protection: We undertook a comprehensive review of her insurance needs and established a tailored suite of Life, Total and Permanent Disablement (TPD), and Income Protection (IP) policies. This was a critical step in protecting her financial wellbeing against unforeseen events.
Investment Management: We aligned her investment portfolio with her High Growth risk profile to maximise her long-term savings potential.
Ongoing Reviews: We established a framework for regular annual reviews to ensure her financial plan remained aligned with her evolving circumstances and goals.
Navigating a Life-Changing Event
In April 2022, Sofia’s life took an unexpected turn when she was unable to continue working due to a mental health condition. This is where the value of our proactive advice begun to show.
Because we had established a comprehensive insurance portfolio for her, we were able to assist Sophie in successfully lodging claims for both Income Protection and Total and Permanent Disablement.
A Safety Net When It Was Needed Most
The wealth protection strategy we put in place has provided Sophie with significant financial support during this challenging period:
Total and Permanent Disablement (TPD) Payout: Sophie received a lump sum payment of $515,000 from her TPD claim. This has provided her with a substantial financial buffer and the freedom to focus on her health without the immediate pressure of financial stress.
Income Protection (IP) Benefits: Since April 2022, Sophie has been receiving a monthly benefit from her income protection policy. To the time of writing, she has received an estimated $443,802.09 in total IP benefits.
Future Outlook and Ongoing Support
Sophie’s income protection policy is designed to provide a monthly benefit until she reaches age 65. If she remains on the claim until then, the potential future benefits are substantial.
Based on her current monthly benefit of $10,287, the potential future payout from her IP policy until she turns 65 is estimated to be over $2.4 million. This figure does not include annual CPI increases, which means the actual benefit received is likely to be significantly higher, providing a long-term, secure income stream.
Propel Wealth continues to provide ongoing support to Sophie, including:
Adapting her financial plan: When she ceased working, we reviewed her superannuation and switched her to a lower-fee product to preserve her retirement savings.
Investment management: We continue to manage her investment portfolio, which has now been adjusted to a Balanced risk profile to reflect her current circumstances.
Ongoing guidance: We are here to support Sophie with all her financial decisions, ensuring she can navigate her future with confidence and security.
Conclusion
Sophie’s story is a powerful testament to the importance of proactive and comprehensive financial advice. The strategies we implemented have provided her with a critical financial safety net, allowing her to focus on her wellbeing during a difficult time, secure in the knowledge that her financial future is protected.
Book a chat with one of our advisers today to put in place your protection plan