October 10 2026
For the first session of the EWL Webinar Series, our partner Tim sat down with Justin Walch, financial planner and risk specialist at MBS Insurance, to talk about wealth protection. Most people would rather avoid the subject until it is too late, which is exactly why we started with it. This article shares the key lessons from Justin's session, including why default cover in super often falls short and when a life insurance review is worth having.
What is wealth protection and why does it matter?
Wealth protection is the part of a financial plan that keeps your assets, income and family secure if illness, injury or death stops you from working. It usually draws on four types of personal insurance, structured so they work alongside your investments, tax position and estate plan.
Justin opened the session by asking the room to name their greatest asset. Most people answered with the business, the home or the portfolio, which are entirely reasonable answers. Each of those assets, however, rests on the assumption that you stay healthy enough to keep earning an income. As Justin put it, you are the engine, and if the engine stops even briefly, the rest of the plan can come under pressure very quickly.
This is why insurance forms part of our wealth management advice and why we bring Justin in when reviewing a client's financial plan.
Is default insurance in super enough?
Justin's view is that default insurance in super can be a useful starting point, but it is rarely tailored to your income, your debt or the needs of your family and business. It is designed around a typical fund member, and most business owners and professionals are not typical fund members.
Default cover often sits unexamined for years, and funds can change policy terms, so the cover you believe you hold may not be the cover you have. None of this makes default cover bad, but it does mean it deserves a proper review before you decide to keep, change, supplement or restructure it.
A claim that shows why the detail matters
Justin shared a claim from his first year as an adviser that changed how he thought about insurance. A mine worker in his early forties, married with two young sons and a mortgage of around $500,000, was diagnosed with terminal lung cancer and given two years to live. He held only the default cover in his super, and he had consolidated two funds a few months earlier, losing one of his policies along the way.
His life insurance claim was declined after three anxious weeks of waiting for an answer. The policy paid a terminal illness benefit only where life expectancy was 12 months or less, and he had been given 24 months. He was too unwell to work and provide for his family, yet he was not considered unwell enough for the definition in his policy.
The story did have a better ending, because Justin found another path through a total and permanent disability (TPD) claim. Because that benefit would normally be taxed on leaving super, he had it released under the terminal medical condition rules so it was paid tax free. With advice in place beforehand, the family could also have held income protection, trauma cover and a life policy whose definition matched his diagnosis.
Why your insurance cover falls behind your life
The most common problem Justin sees is cover that made sense when it was arranged but never kept pace with the client's life.
He described a young doctor who arranged income protection on a salary of around $100,000 when buying a first home. Seven years later the same doctor was earning around $500,000 as a specialist and carrying more debt, yet still held the original policy unchanged.
A helpful way to think about personal cover is through the three Ms of mortgage, marriage and milestones. Taking on more debt, welcoming a child, adding an equity partner or selling a business will usually change the cover your family relies on.
The four types of personal insurance in a wealth protection plan
A complete wealth protection plan usually combines four types of cover, each designed to respond to a different event. The table below shows how they fit together, using the scenarios Justin walked through with Tim as his good-humoured example.
Why the structure of your insurance matters as much as the policy
In our view, choosing the policy is the simpler part, and the structure around it is where most of the value or the damage sits. Decisions about who owns a policy, who is insured and where the premiums are paid from can change the outcome of a claim by hundreds of thousands of dollars.
Premiums might be paid from super, personally, through the business or from a family trust, and each option carries different tax and estate planning consequences. A TPD benefit paid from super, for example, may be taxed at up to 22% on its taxable component when the member is under preservation age, depending on their circumstances. This is why we believe insurance advice should never sit in a silo, and why it needs to be coordinated with your investment, tax, estate and succession planning.
Insurance for business owners and the second family
If you own a business, you effectively have two families to protect, the one at home and the one you share with your business partners. When a co-owner dies or becomes permanently disabled, their family may need cash at the same moment the remaining owners need control of the business.
Without a funding arrangement in place, the business may not have the liquidity to buy out that share. The remaining owners can then find themselves working alongside a partner's spouse or estate, which is rarely what anyone intended. A buy-sell agreement funded by life and TPD insurance gives everyone a clear path, and it is far easier to arrange while everyone is well.
What happens in a life insurance review?
A life insurance review is a structured look at the cover you already hold, the gaps around it and whether it still suits your income, debt, family and business. The review MBS Insurance offers is complimentary, takes around 30 minutes and always starts with your existing policies rather than a new recommendation.
These questions are a useful starting point to work through with your adviser before any review.
- Is your cover held only through default insurance in your super fund?
- Has your income, debt or family situation changed since the policy was first arranged?
- Who owns each policy, and where are the premiums currently being paid from?
- Do the policy definitions, including the terminal illness definition, still reflect current medical practice?
- Does your cover line up with your estate plan and any business succession documents?
- Would you have someone experienced on your side if you ever needed to make a claim?
A good review will sometimes conclude that your existing cover is right for you and should be left exactly as it is. Tim noted during the webinar that he has watched Justin give that advice many times, and it is a large part of why we are comfortable introducing our clients to him.
Why claims support is the real test of good advice
The real test of any insurance arrangement comes on the day a claim is made, rather than the day the policy begins. An experienced advocate who knows what medical evidence an insurer requires can be the difference between a claim being paid and a family giving up partway through the process.
Protecting the choices your wealth was built to give you
Insurance cannot change what happens medically, but it can change what you are forced to do financially afterwards. If you would like an introduction to Justin for a complimentary review, please contact the EWL team.
Frequently asked questions
How much does a life insurance review cost?
A life insurance review with MBS Insurance is complimentary, and there is no obligation to change any of your existing cover. The review typically takes around 30 minutes and focuses on the policies you already hold.
How often should I review my personal insurance?
Personal insurance is generally worth reviewing whenever your life changes significantly, such as a new mortgage, a new child or a business sale. Even without an obvious change, a review every few years helps confirm that your cover and its structure still match your circumstances.
Can I access my super early if I have a terminal illness?
You may be able to access your super tax free if two registered medical practitioners, including a relevant specialist, certify that you are likely to die within 24 months. Your fund will confirm the exact requirements, and the Australian Taxation Office explains the terminal medical condition rules in more detail.
What is the difference between TPD and income protection insurance?
TPD insurance pays a lump sum if you are unlikely ever to work again, while income protection pays a monthly benefit while you are temporarily unable to work. Many people hold both, because each responds to a different stage and severity of illness or injury.
