She's On The Money - The Insurances I Would Never Buy... From an Insurance Expert

Episode Date: July 15, 2025

If you've ever been offered insurance at the checkout and thought, “Wait… do I actually need this?” this ep is for you. From phone cover to pet insurance, there are so many policies that sound smart in the moment but just turn out to be clever marketing. So I called in friend of the show and insurance expert Phil Thompson from Skye Wealth to help us sort the genuinely helpful from the total money drains. We’re breaking down the covers that quietly siphon your cash, the underrated ones that actually protect your biggest assets (you might be surprised what they are BTW), and the sneaky traps hiding in default policies. If you’ve been meaning to clean up your insurance but don’t want a boring lecture about premiums and policies, this is your no-drama, straight-talking guide on what to keep, skip, or switch. In this episode:💸 The insurances we’d never waste our money on 💸 Why default income protection through super might leave you stranded when it counts💸 Pet insurance or DIY vet fund? We put them head-to-head💸 The spicy truth about funeral insurance (and why it’s a hard pass for us)💸 How to get expert insurance advice without dropping four figures💸 The “Ferrari rule” that’ll change how you think about your income forever GET YOUR INSURANCES SORTED: With Phil and his team at Skye Wealth here. Join our Facebook Group AKA the ultimate support network for money advice and inspiration. Ask questions, share tips, and celebrate your wins with a like-minded crew of 300,000+.And follow us on Instagram for Q&As, bite-sized tips, daily money inspo... and relatable money memes that just get you.Acknowledgement of Country By Nartarsha Bamblett aka Queen Acknowledgements. The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708, AFSL - 451289.See omnystudio.com/listener for privacy information.

My name is Natasha Bamblett, I'm a proud First Nations woman, and I'm here to acknowledge country. Tii, gilinyan ganya, nianakaka yao yinbina waka, nianakai nianbina yakarumja, duminyagumiga dumiga ithawaka nirawamundamun imalan, mumibangada bomi ininyalan waka, gaunan yakarumja, wutunadana. Hello beautiful friends, we gather on the lands of the Aboriginal people, we thank acknowledge and respect the aboriginal people's land that we're gathering on today take pleasure in all the land and respect all that you see she's on the money podcast acknowledges culture country community and connections bringing you the tools

knowledge and resources for you to thrive she's on the money she's on the money Hello and welcome to She's On The Money, the podcast that keeps your finances ready whatever plot twist is coming next. If life threw you a curveball tomorrow, would you be ready for it? Because here's the thing, most of us don't find out we've got the wrong cover until it's too late. So how do you know if you're wasting money on pointless policies or missing the one thing that could actually save you? Stick around because we're pulling back the curtain on the insurances we would never buy and the ones you simply can't afford to ignore. I'm Victoria Devine and today we are joined by someone who knows the insurance world

inside and out, Mr. Phil Thompson. He's an insurance expert and big dog CEO of Sky Wealth and if there's anyone who can help us sort out the financial fluff from the real deal, it is this guy. Welcome back to the show, Phil. Thanks for having me, VD. I'm excited that you're here again and that you've somehow consented to be on my podcast again. I appreciate changing my title to Big Dog. I'll take that back to the office and flow that around. My name on Slack for a long time was Big Bad Bolts with lots of W's and S's at the end, but you will be very excited and I don't know if this reference is going to be completely over your head, but my name on Slack now is Victoria Labubu. You know how old I am and how not online I am. And my profile

picture is a pink Labubu and my status is currently set as really ugly. I do know what Labubus are because one of my team said, no, and the kids don't know what it is, but one of our team said, I want to spend $400 on this. Absolutely not. And I berated her. I was like, what are you doing? That's why it's my profile picture because I just think that they are so ridiculous. Anyway, we wouldn't spend money on the boo-boos in this house and also on dodgy insurance. Now, before we start calling out the most questionable insurance products on the market, Phil, I think we actually need to have a chat about just how big the insurance industry really is.

The Australian insurance space is worth more than $150 billion a year with general insurance like car and home and travel, making up nearly $66 billion worth of that. And I would say, Phil, that's a lot of cover. That is a lot of money. It's a lot of cover. Like that could buy you a new house. Yeah. Like that could buy you a new car. And when you zoom in, the average Aussie household is spending somewhere between $1,500 to $2,000 every single year on general insurance. So I guess it's no wonder that people want to know whether they're actually getting some value out of this or not

And Phil, I know you have definitely seen it all, the good, the bad, the ugly. And I was blown away when I saw that one in five Australians have bought insurance that they don't fully understand. Add to that fact that nearly half of us aren't even confident our insurers are going to come through if we need to claim. And it starts to make sense why insurance can actually feel consistently, or maybe just like something we would rather avoid. So I guess let's start there. Phil, why does insurance get such a bad rap? I mean, it's your entire career, so I'm hoping you know the answer to this. Yeah, so we work in a subsect of the insurance,

so we don't walk across the whole gambit of it. So you're not going to sell me pet insurance? No. iPhone insurance? No, I will not say that. No, not car insurance. So all of the stuff that I probably shouldn't be spending money on to begin with, you don't sell me.

That's right. The thing that you can afford to replace yourself, you probably don't need insurance for that. So, talk to me about insurance because I feel like so many of us, we think we're doing the right thing and we go ahead and we insure something. Like we might be at Apple buying a brand new phone and they offer insurance and we go, well, this is a really big purchase and it's really important. This guy's just told me that like insuring it is a very good financial decision. So, we do it. But so many of them, I would say are completely unnecessary. What do

you reckon the most unnecessary insurance is? I mean, iPhone insurance, like phone insurance is soft and like incredibly expensive and not necessary. These extended warranties, like anytime I go to JB Hi-Fi and I buy something. No, I don't want your extended warranty. Like the whole product is going to be out of like fashion by the time that extended warranty ends. Yeah. I've used it once. I bought it in extended warranty once and I had a warranty claim, but I just was like, it's literally five years ago. I don't, I'm not going back and talking about my, my laptop that broke in the last five years. And also like I need a new laptop at that point. Yeah, exactly.

So, those extended warranties, really, they're just insurance policies. That's what they are and that's what they're built for. And so, they're the type of insurance policies that I don't love. Really, at the end of the day, insurance is about protecting something that you can't afford to lose. And so, the things that, you know, like health insurance is really important because you may have a health event that is really significant cost. So, health insurance has that.

If you have a car that's worth $50,000 and if you wiped it off and hit someone else's car, well, you need insurance for that because it may be a significant cost if you can't afford to pay that, which all of us can't. Yeah, and I think that from I'm an ex-financial advisor, you're a current proper financial advisor. I think from our side of the story, we just see so many people who have car insurance, have like house and land insurance

or whatever and then they don't have income protection and you just go, I see that you can see value in it but you can't see value in your own income. Why do you think that's a thing? Because so many, like if you asked me, Victoria, you have to get rid of every single insurance under the sun. What one are you keeping? You get one. I can always guarantee this is the one you would keep as well. And for me, it's income protection. Like I know that if my body breaks, I can still pay for my son. I can still, you know, make sure that my mortgage repayments are being made and that I've got income coming in the door each and every single month. Whereas if my car broke,

well, I can use my income right now to purchase a new one. But if my car broke and I didn't have income protection, we are in a bit of a pickle, right? Like my body is the thing that is the most valuable to me. And it just, it blows my mind that people don't see that. I think people just underestimate the value of their income. So one thing that we do internally at Sky, we don't really talk to a client about this too much, as much as we probably should, is we calculate the value of someone's income based on their today's income, assuming just a CPI, like inflation increase on their income, no pay rises or anything like that, and assuming retirement at age 65. And if you get someone on a relatively modest income that's fairly young, the value of their

income is millions and millions of dollars. And so, people just don't really equate that, if I'm on $50,000 or $100,000 or whatever income I'm on to retirement and compounding that year on year and that loss, that's really significant. And so, yes, the likelihood of a claim may be lower than dropping your phone and breaking your phone and needing that replaced. But the cost of that replacement of my income is really significant. And we probably understate or underestimate that value of our own income. But Phil, I've got income protection in my through renuation, I saw there was like a two-year policy there. That's good, isn't it? Well, to cover your income for two years, it is good.

Yeah. But what about after those two years, Phil? Am I good to go? Exactly. This fun thing about insurance, it's always this balance between how likely something to happen and what's the cost of that thing. So from an insurer's point of view, I always love getting stats on insurers and like, where are they spending their money? From an income protection point of view, most of their claims are for policies that only last for two years. So the claim, you know, someone's injured and then goes back to work after six months. Good. That's the perfect outcome, right? And that's majority of their claims in terms of raw numbers that they're processing. But the cost

to their business, more than 80% of their cost for income protection is actually for claims that go longer than two years. And so you think about it from the other point of view, if insurers are paying most of their money towards those long-term claims, we want to make sure we're protecting that. So if you go into your super fund and you log in and you look at, you've got an income protection that only lasted two years, think, yes, that will protect me for majority of the times I will ever need this.

But for the really big downside- But if stuff gets really real- Then, you know, you're going to be well underinsured. Yeah. And I think a lot of people go, oh, well, that's such a good deal because it's through my superannuation. And like, you don't have to

necessarily get rid of that. You can talk to a good financial advisor and get that topped up. Like, I remember when I first got my income protection sorted, I had my two-year policy, which is why I always bring it up. I had my two-year policy and then I had one outside of superannuation as well. And I was

kind of carrying both for a while because that's what put me in the best possible position because obviously superannuation was a nice little tax benefit, but having it inside super for the entire time didn't make financial or logical sense. Now, two of the most, I would say divisive types of insurances, I would say lots of people get heated about private health insurance, whether you need it, whether you don't, like we've got Medicare in Australia and other is pet insurance. So, Phil, I want to know, what are your thoughts on both of these? So, your pet insurance. Let's go. I don't have a pet. No, I do. And for this conversation, let me give you a little bit of context.

I paid for pet insurance when we got Lucy in 2021 and it cost me about $480 in premiums for the year and I got $15,000 worth of car. Yeah. So, if you ever needed to claim, you were capped at $15,000 and you couldn't get, if it was something significant, you weren't getting more than that. I personally don't love pet insurance because of the cost versus the value that you're going to get for it can be a misbalance there. So I personally don't love it. But just like with any type of insurance, like for yourself, making sure you've got the ability to save enough money for that downside risk. So if something happened to Lucy, you've got the money there saved. It's not going to impact your lifestyle. You're not going to go

eat baked beans for weeks on end to afford it. But I would, it's my dog. Yeah, because everyone does. Everyone will spend a lot of money on their pet when they're sick, ill. It's an extension of their family. And so that's something that you just need to be aware of. You either pay an insurance premium to cover that cost or you have the money available or access to that money. So it is really important.

Although if I had a pet, I probably wouldn't have pet insurance. I would make sure we had some form of... Yeah, the cash in the side. Yeah, cash available. And I think that's the important thing. Like when I got Lucy, it was my first time owning a dog and I was like, I'm going to do all of the right things. I'm going to get paid insurance. And then, you know, after the year was up and they sent me my premium again, I was like,

I am very, like, I'm in a very privileged position to have enough savings that if something happened to Lucy and it cost me $15,000, like, I don't really want to spend my savings on that, but I could. And so I just made the conscious decision to start putting an extra $500 a year into savings instead. Cause I was like, well, that just seems to make more sense. And thankfully knock on wood up until this point, she has not cost me $15,000. And to be fair, if something ever happens, you will never save the premiums to cover the cost. You just won't if something happens. It's just making a bet that, hey, hopefully something doesn't happen, that we don't need it. The thing about insurance is I don't think it's wrong for anyone to get pet insurance at all.

Oh no. I think it can be right for certain people. But it's divisive. Like so many people are like, that's a scam or that's a good, it's not. But like, is it in line with your values? Yes. And i think it's important to think about what is our total cost of insurance and do we have the right ones that's where it's a conversation where for someone it may be okay to have pet insurance if they have certain other insurances that you know that we believe to be more important like if you're protecting your own income and you've ticked that box if you're protecting your own life disability like making sure your own personal insurance is is covered and sorted and you've got ability to afford the pet insurance as well, then great. Go and spend money on that. The thing

that I kind of have a disagreement on is if someone says, I don't want to have personal insurance, I'm going to cancel my income protection because the premiums are too expensive, totally fair and reasonable, but then go and pay pet insurance and go, unfortunately, Lucy's not making much money for you. No. It's just a straight cost. Your ability to earn an income is making money. So protecting that is more important. So it's all about how do we prioritize these insurances properly. Yeah. I think that there's also a fair bit of confusion if you've never looked at your insurances before to go, well, why would I see a financial advisor to talk about like, you know, income protection and TPD? I'm like, I've got private health

insurance. I feel like that is such a common response when I say, oh, have you got insurance? They're like, yeah, private health. And you go, that's actually not enough. Is that still something that you guys are coming up against consistently in conversation? Yeah. Because the cover that we help people set up is the personal insurances and and for events like cancer heart attack strokes or or just mental health time off work the personal insurance cover will pay you for those events and so people will think well i've got private health if i have cancer i'll just go through the private system and that's okay and i just got off the phone last week with with a client who found out she had cancer that's the worst part of your job like yeah dealing with claims is is

hard and, you know. I'm glad they have you though. I just know that you're the best person in those situations. Like if I've got something going wrong, you are one of the first people that I pick up the phone and go, that's all falling apart, Phil. I feel like you've got your shit together in the best possible way. Yeah. And it's like, and it is, I mean, look, it's emotionally taxing and it's difficult. You know, we're not going through it, but we're empathizing with our clients and walking through that process. But this phone call, this client and like incredibly positive like had such an amazing outlook on her situation and but was talking to her last week and she's like oh yeah we cancelled our trauma insurance you know two years ago and I was like

and and fortunately she had income protection that pays her it's an old policy that pays her six months of income protection just on a cancer diagnosis so there is something and she was just like look at least it's something you know my sister's over from the UK so that'll cover flights that'll cover, you know, go towards something. And this was like $60,000 that was going to be paid out. And in her mind, it was like, at least that's something towards it. And so, you know, when people are setting up the policy,

they tell me that they've got private health insurance, that's totally fine. When they go to claim, it's rarely, I've got private health insurance, it's fine. People's commentary is always, oh, that's great, the money's in the bank account. Maybe it's probably not enough often. And so, one bit of data that an insurer has come out

saying that they've talked about what is this total spend on health spending. Private health insurance covers half the amount of spending than individuals are spending on medical events. So, what that means is the government spends a huge amount and then personal spending is covered that covers more than twice what private health is funding towards health events. So, when people say we've got private health insurance that'll cover it, well, it only actually covers half of what the total, you know, spend on these health events is. Yeah. And to get a little bit, I don't know if the word is morbid here, but like if you get a cancer diagnosis and you're going through the private system, like that's great because you can pick your doctor, you can pick, you know,

your doctor can then pick the team that works with them in probably a more cushy environment. You're probably guaranteed your own hospital room. That's really nice. But you might've thought, oh, if I go through the public system, like there'll be weights, there'll be this, there'll be that like, if you've got a dramatic cancer diagnosis, you actually go to the front of the line in the public system. That's why there are so many weights. Like your ankle surgery is taking two years. It's because the theaters are full of people with things that need to happen this week or next month or within the next 30 days. And more often than not, if you are diagnosed with a cancer that needs operation, your doctor has to get that done within a certain time period. For some people,

that's 10 days. Some people it's 20, some people it's 30. You actually get flown through the public system. And more often than not, the same doctors actually work across both. In the public system, no, you're not guaranteed your own private room. You might get a really good doctor that also works privately, but they might not be able to pick their team. That's fine. There's so many like little nuances, but like what happens when you get out of hospital? Like you can't go back to work because you've got 12 weeks of recovery. You can't go back to work because you literally have PTSD and you're exhausted from all the chemo drugs and like you would really love the financial freedom

for your husband to stay home for a few weeks and just like decompress from the situation that was. Like these are the things that I want you to be thinking about, not just, oh yeah, public versus, I'm fine. Like I get that and it is such a privilege to look at public versus private in that way because you don't get to see the like dramatic nature of what private and public can actually look like

when push comes to shove. and for me, it's actually, well, what happens next? Like say you get diagnosed with breast cancer and you've got, you know, a few rounds of chemo and then you go into remission and that's fantastic. Your body more often than not is compromised. I very much doubt after having this whole diagnosis happen, you return to work in a full-time capacity. Like you do not have to do that if you have proper insurances to make sure that you can return, hopefully, because like you might be like me and you're like chomping at the bit to get back to work. But like you also need to protect you and you can't do that if you're stressed about money. And that's right. And

private health insurance covers a lot of bills, but it doesn't cover money in the bank to give you space. That's really what personal insurance cover does. It just gives you breathing space. And you know, we help a lot of clients going through this claims process. And that's the biggest thing is when money hits the bank account, you can just, you can just feel the sigh of relief that people have is just going, oh, we've got breathing room now. We've got capacity to make decisions. And yes, insurance premiums cost money and we've got to pay it on the hope that we never actually get the money back. I actually want it. Like I used to say this to my advice clients. I'd be like, I actually would love this to be the biggest waste of money in the entire world. Like

I hope that when you're 65, you and I get to sit down and I'm still your advisor and you tell me, V, I wish I never got insurance. I didn't get to claim on it. And you know what I'm going to say? good because it means you never experience a significant health event. And wouldn't that be a privilege? And all insurance is really, you know, we all look at insurances as bad, like the insurance companies are bad and we're good. But really insurance at its core is about a community coming together, putting money into a big bank account. When one of us unfortunately need it, they can pull the money out. So we all feel like insurance is a waste of money. You and me feel like insurance is a waste of money. Good because I'm paying for somebody else's

That's right. Peace of mind. Yeah, we work with clients who are claiming and they get significantly more money in return than they've ever paid in premiums. And that's because we've all come together as a community and said, let's put money into this bank account. And that's really why, I mean,

they're for-profit businesses, insurance companies. So we're not talking about pure altruism, but as a policyholder, me not claiming. That's your motivation. I know other people are claiming on it because they need it at their worst moment. like yeah we've all we all know someone who's had a cancer scare you cannot walk around australia without knowing someone who has gone through cancer uncle auntie brother sister whatever it

is we all know someone and having personal insurance cover is just allows for breathing space and as i said it is the most kind of emotionally taxing part of our business but the most rewarding part is working with clients going through a claim and just the sigh of relief that they have knowing that there's money there. Yeah. Yeah, that is so true. Let's pivot a little bit because I want to continue on the divisive topic.

Let's go. Let's get spicy. I want your opinions on another relatively topical insurance and that's funeral insurance. How do you feel about that? I can't stand it. Neither can I. I was like, hold on, is he going to go, oh,

if it gives you peace of mind, like I just think it is trash. No, I think it's a waste of money. like it's really not so much an insurance policy because people who are buying it are often you know getting closer to their funeral and it's really pre-paying a funeral. Did you know so this is like a side note I'm currently helping some people with their retirement plans and I was like looking on the Money Smart website and like the cap of assets that you can own before you start to have your pension influenced is about $470,000. And one of the recommendations that the literal government website says- Is a funeral bond?

Yeah. Is this a joke? Like, is that, I was reading that and I was like, surely I'm on the wrong website. And I was not. Money Smart is recommending that like, oh, if you're over the limit and you're like trying to decrease your assets, like maybe a funeral bond, I would actually prefer you to gamble it away. Do you know what I mean? Like, I was just looking at it going, what? What? Like, Phil? Yeah. I wouldn't say it's a prudent financial strategy getting a funeral bond to reduce your assets. I was shook. And then I did a little bit more research in preparation for this episode. And once you move over to the ASIC website, it says that the average funeral payout is about eight and a half thousand dollars. But many policyholders end up

actually paying more than double of that in premiums because we're all living longer and essentially so many people take out that cover at a young age. Like, and if you're retiring and you're on the Money Smart website and you're like, oh, I actually have just over the threshold of assets. I'm going to buy this insurance bond and keep tipping money into it. And I am literally only 65 because I'm retiring right now, but you live another 30 years, which is very probable in this day and age. Like what? Yeah.

That is actually unhinged to me. Like there are so many cases online of people who are paying $20,000, $30,000 in premiums. What is this? To me, scam. Yes, you get paid out when you die, but it is not worth it. Oh, yeah. I mean, I wouldn't recommend it.

And I was actually talking to my mother-in-law the other day. Oh, please tell me they don't have it. No, no, no. She was talking about her mum. They always thought she had funeral insurance, but then when they got there, they couldn't find any paperwork. I was about to say how many people have actually documented their funeral insurance properly enough so that when something happens, the kids are like, oh great, like we have to organize. Like,

what if you went and got it because you thought it was a good decision, but you don't talk about money with your family? Which is so common. Exactly. And something that's interesting, if you're an insurance geek like myself, APRA posts all their stats, all their data. They post, actually I'm not sure they still post the revenue per insurance product but you used to be able to look at APRA's data and they show you what how many premiums and how much is being paid out on a per insurance policy basis and so you can actually see what percentage of premiums are going towards claims and funeral insurance the the premium to claim ratio is so low yeah that it just means it's not a good bet no absolutely not you know as you said you're paying more than

you're ever going to receive it drives me insane because if you look at the marketing of these companies, they're all like, oh, well, actually you're not leaving your loved ones with a financial burden. A funeral can be expensive. Please don't get me wrong. Like the average funeral I think is between five and $10,000 these days. But if you're putting that money into a savings account and you know, something happens to you and your family gain access to your funds, great. They can actually spend it in line with how they think they want your funeral to be planned or maybe even how you want your funeral to be planned because you can do that.

And they might even have some extra money left over for a really good wake. Like whereas a funeral plan is not paying for that. That is not how that's going to work. And like a financial burden on your family, that is playing into people's emotions and I just think it's like so manipulative. Yeah.

And this is where it all comes down to at the end of the day, we've all got living expenses, we've got to spend money. it's just allocating how much you want to spend towards insurance is is what needs to be really thoughtful um and just thinking about what's the alternative and so yeah my view is i don't love funeral insurance at all all right funeral insurance is out i reckon we should go to a little bit of a break because we've talked about some controversial insurances and i'm sure people actually would love to hear from a proper financial advisor some actual advice like all right well he told us what he doesn't like what does he like so because we know that some of them are trash and

some of them are actually not as bad as we thought. We're going to go to a really quick break. And then on the flip side, I'm going to put the pressure on Phil to actually share the insurances he believes are absolutely non-negotiables. The stuff that could seriously save you when things don't go to plan. So stay with us. We will be right back. All right, welcome back. And we have talked about what we think is trash and what we think is maybe worth your cash. Phil, it's time for, I would say, the important stuff. Like instead of just talking trash on insurance that we don't think is worth it, like maybe pet insurance and definitely funeral insurance. What insurances do you think every single person should have locked in no

matter what? I mean, personal insurance is the most important thing. So what is personal insurance? There's really four to five different types of cover. So income protection, as you said at the start, if you had to cancel everything else, but keep one, income protection is the one. And so that protects your income if you can't work because of an illness, injury, sickness. If you get made redundant or you, you know, you get fired, it's not paying you that, but it's for health reasons. If you can't work, you'll get paid an income. So that's part of personal insurance. Then there's life insurance. So VD, if you pass away, there's money. It's pretty simple. That's the one I think most people understand. If it's easy. You're dead or not. You're dead, you're

dead. In saying that, I was like, there's a little bit of flexibility there. If you have a terminal diagnosis, you might be able to cash in on that a little bit early. Correct. And, you know, I, you know I think we've spoken about this one of my really close friends yeah was terminally ill and it was super important for him to get the claim in his bank account before he passed away and it was pancreatic cancer and it was like 12 months before he was diagnosed before he and it was so messed up and so how's his family now yeah they're doing they're doing it I mean still they're two young boys they're just starting high school next year you spoke about him he hadn't passed away yet you spoke about him last time you were on the or the time before you were

on the podcast. And so that terminal illness payment, it didn't change whether he got it after he passed away or not. It's the same money. Yeah. So, but for him, it was so important to know that it actually happened. I had, I set this up to protect my family. I know the money's in the bank account and my family is protected. It was incredibly important to him. So yes, there is nuances and a bit of an asterisk about life insurance. The other one is like disability cover disability cover is a lump sum payment and that's the lowest likely event to happen you know to be totally and permanently disabled is really unlikely to happen you're more likely to pass away than to be totally we had rihanna on the podcast a while ago and she shared her story

of diving into a pool at 21 in bali and becoming a quadriplegic and like you don't expect that stuff to happen but like she shared even just how much it cost her on a annual basis to pee because she can't do that. And like, I think that these are the things that no one really wants to talk about because it's a bit icky, but the fact that she's spending, I think it was nearly $80,000 a year on catheters. Like where's that money coming from, Phil, if you're not working and you're not able to. Yeah. And look, some of the answer is NDIS. Oh, 100%. We do have an NDIS scheme and that's great, but that can change with governments. And also that is going to be so limited in terms of quality of life. Yes, you might get your catheters. Are you able to make the

appropriate adjustments to your home so you've got the right ramps and you're comfy getting in and out of your car? Like the NDIS often don't cover all of the things that are about quality of life, but more about just getting by. And the winds can change. That's the scariest bit about an NDIS scheme. You know, governments can, there can be cost blowouts and then they can rein those costs back in. And what is reining costs back in from a government point of view is we're not going to give as much to people who need it. And so that, so, you know, being reliant solely on that is, is a risk. So disability is the least likely to happen, but the most financial impact, like it's really significant. Then there's trauma insurance or critical illness, which pays

for specific medical events. So cancers, heart attacks, strokes, if any of those are diagnosed or, or happened to you and a specific severity, then there's a lump sum payment that gets paid out that's the most one that we help our clients claim on yeah because it's the most likely to happen and there is child's cover that we we like we recommend for our clients is if something significant happens to your kids there's money in the bank gives you breathing space that's really what these insurance policies are so when we talk about our priorities for me and yes that's what we do and that's our business model is to help people set this up but the reason i can do anything in financial advice i can help people i can be any you know a finance bro and help people invest

but we've chosen to work in insurance because fundamentally believe that personal insurance is incredibly important so if you're yeah and i love that i love that i remember when you were telling me that you were going to start sky wealth and you're like do you reckon it's a good name i was like yeah it's great like and you were so like i don't know if it'll work but i'll give it a crack like i reckon i'll just do insurances and like at the time like i thought it was a really good idea because it was like a good business model but i can almost imagine every single other advisor being like, what is he doing? Is he crazy? Like he's not going to do investment. He's not going to do superannuation. He's not going to do budget and cashflow. This guy is

just going to do insurance, which for a lot of advisors, I would say is a hygiene factor in the nicest possible way. A lot of advisors who do investment or they really focus on budget and cashflow or pensions or whatever, they kind of like do insurance and they know it's important, but it's not their favorite thing to do because it is quite admin heavy and there's a lot of back and forth with insurance companies and it can kind of like low-key be the bane of your existence as an advisor if you're just so passionate about investing and like that was low-key me when I was an advisor I was like no this is incredibly important but nobody liked negotiating with the BDMs no one wants to go back and forth with the underwriter and be like look I know that's on

their record but they've recovered like and I would negotiate all the time it would take hours so I remember thinking that you were low-key a little bit crazy but also it was genius because financial advice can be so unobtainable so like financial advice when I was working as an advisor which I'm not now was anywhere between four and a half thousand dollars and ten thousand dollars for my initial statement of advice for most people that is not reasonable and it's not because I didn't want it to be reasonable it's because that's what it cost to get the advice together to be able to create the statement of advice, to pay my team, to keep the lights on in my office, to pay for my license, to do all of those things. Phil, I know this sounds really markety,

but like, because you only do insurance, if I am listening to this and I'm like, I can't afford to go see a financial advisor. How much does a Skyworld statement of advice cost for a single and then maybe for a couple? Yeah. So we've changed up our model slightly. So, if you are like just employed and don't have any major complexities, then we charge $330 for an individual. $330 to get your advice done just for insurance. That is elite. And that's it.

And we only do insurance. So, if someone says they've got an Australian super, but they're looking at Host Plus. Cool. Sorry, can't help you. Then we will say, just hold your horses. We'll look at any insurance within Australian super, but we're not going to tell you to go and invest your money here or change your asset allocation. So it is very scoped advice, you know, the jargon that we use internally.

Well, I think it's good because you could go to another advisor and I think this is why like you and I get on like a house on fire but we also get on like a more altruistic level because if you go and see another financial advisor for insurance only advice, I would say minimum $2,000 because they honestly, they don't have the model to support going and just doing insurance for a client. They also kind of want you to be a little bit scared away from that

because they don't want to do that. Yeah, that's right. Let's be like brutally honest. Most advisors are like insurance only clients. No, thank you. Yeah, and to be fair, we work with a lot of those firms because they refer them to us. Yeah, which is genius.

You're like, I'll just do their insurances and assemble them back to you. Yeah, because I mean, I'll finish talking about our fees. Sorry, sorry. Just to touch on that, like, let's be honest. Investments is fun. Investments, this money magically increases. Yeah, like I have a whole investment masterclass.

Like I'm obsessed with it. Because it magically increases. This thing, this asset increases in value. How good is that? And what we do is we help people pay money to an insurance company or get paid from an insurance company. I'm not going to lie. That doesn't sound as sexy as my investing masterclass.

No, it's so unsexy. Yeah, sorry. And so that's why a lot of advisors aren't doing it. Yeah. So just back to our fees. So $330 if you're an individual and you're just PAYG, so you're just employed. And for a couple, $495.

Yeah. Now, if someone is self-employed, if they've got like defined benefits, self-managed super funds. It's a bit more like complex. If they're an expat, so we help people who are living abroad get set up insurance policies in Australia, any one of those four things, then it's a little bit more expensive. So $770 for individuals.

Yeah, because your advice is actually a little bit more complex. Yeah, and looking through profit and loss statements, it just sounds easy, especially if you just got to like. It's not. If you've got a simple business, it's still not because the insurance that we can get is so much more complex. So yeah, more complex clients have slightly higher fees. Yeah, it sounds like I'm, I don't know,

the biggest fan of Sky Wealth, but I literally am. Like people actually message us on a weekly basis and they'll be like, hey, who was that insurance dude that you mentioned on the podcast? And I'm like, it would definitely have been Sky. Like it definitely was Phil. Like I just, I'm such a fan of it because it's, I guess from the flip side

and we talked about this before, having been an advisor, I've seen how bad it can be and it gives me so much anxiety to think that my community aren't protected or maybe they don't see the value in getting protected. And like we live in Australia and we are so lucky. We have Medicare like and at the moment we're seeing all of this stuff happening internationally

like Trump's making decisions left, right and centre. I saw a TikTok the other day, Phil, where this American mum was breaking down her invoice for giving birth in an American hospital and she was like, oh, it's so good because like this is a good deal and it was $44,000 USD for her to give birth. And she was going through like line item by line item. And the comments were obviously,

oh my gosh, that's so good because she had an American audience. Mine was 66,000 and whatever. But then there were a few comments from Australians being like, this is crazy to me because I went through the public health system in Australia. I had a C-section or I had an epidural. I had all these things.

We had three daughters. We walked in. I stayed. We had couples rooms. So I stayed over for three or two or three. A little sleepover moment. It was sleepover. We had a date night, me and Kate.

I love this. Not so much of a date night for her because she had to. No, but you had a good time. I'm glad she was along for the ride. But, you know, and then we walk out. We're like, are we good to go? They're like, have a good day. Enjoy your new baby.

It didn't cost us a cent. Because we live in Australia and we see these things and we are so lucky to have these things, I think there's an underlying assumption that when things go wrong, we are looked after. And we are known globally as the most underinsured country in the world. The most insured country in the world, Phil, you probably already know this, is who?

Oh, he doesn't know this. It's South Africa. Oh, yes. It's South Africa. They are the most insured country in the world and then we are the most underinsured country in the world. I love it. You know, trauma insurance was invented in South Africa.

It was. It was. I remember going to all these conferences and like a lot of insurance companies actually based in South Africa car. And that makes sense because it turns out they love it. Like everybody has insurance coming out of the kazoo over there. And it's a bit of a she'll be right attitude. That's the issue. And coming back, like this is, you know, we help people set up bills. It's an increase to someone's lifestyle, setting up insurance. Now, the great thing that we have in Australia is your super fund

can fund a lot of the premiums and it can be really tax effective. So it doesn't matter if you're with Australian Superhost Plus, wherever, we can set up the right insurance policy with the company of our choosing or really what we think is best for their clients. And whoever they're with from a super point of view, that can fund the premiums. Yeah. And I love that because for those of you following along at home, the superannuation environment is taxed at 15% instead of your marginal tax rate, which most people listening to our podcast is probably going to be around 30%, which is a 15% discount. Money win, Phil. Yeah, exactly. We love that. That's very sexy. Yeah. And you pay, especially life and disability, you pay pre-tax dollars for those

premiums instead of paying it out. Like if you've set up an insurance policy directly with an insurance provider, you're almost certainly not paying it through super because most of them don't allow it. And so you're paying tax on your income to then pay these premiums that aren't deductible. Why don't we just pay it inside super? So we've got a lot of free kicks in Australia when it comes to personal insurance cover, that means it's really advantageous to go and see a financial advisor because we have choice of insurer, regardless of what super fund you're with. So if you're with Australian Super, you don't have to go to TAO, which is the insurer who insures Australian Super. Yeah. I think that's one of my favorite parts about it. I'm like,

yes, it might impact your day-to-day income or your cashflow. And I mean, Phil, this morning, you and I got breakfast and we were talking about the cost of living crisis and we're talking about how ridiculous groceries were and all of that stuff. And we are both in financially privileged positions, but we do still see it. Like you're dealing with clients every day who are probably like, okay, cool. Like, let me see how I can fit that into the budget. Because we're not just assuming that, you know, for income protection, it might be a thousand dollars a year. Like it might be more than that, depending on your income. We're not expecting you to just be like, oh yeah, she'll be right. But it is something that you genuinely should be prioritizing because it's

your livelihood it's your income it's like the most important asset that you need to protect so knowing that i'm running out of time with you today i want to know is there like a golden rule for deciding if insurance is kind of worth it for you or not the kind of analogy i love because we've got a lot of young team members coming into our business all of them tell me i'm young i don't need insurance and i get on my high horse the ones that have been around for a bit longer and And when a newer person comes, they're just like, I'm going to team fill up for this rent. So the thing I like to think about is take your income,

whatever it is, big, small, doesn't matter. Take your income, work out how old you are. So go age 65 minus my current age. Whatever that may be, go your income times that number. So how many years until retirement? My current today income. Assuming it's not going to increase. If it's a million dollars, it could be $3 million.

That's without any increase, without any promotions. And think about if I had a Ferrari that cost me $3 million and I was driving it every single day, would I say, I'm young, I'm a good driver, I don't need to insure it? Or would I go, that's a $3 million Ferrari if that crashes or if there's an issue? I'm too scared to drive it if it was uninsured. I wouldn't drive it at all.

Or like if someone said, do you want to drive my Ferrari? I'd first say no because I'm too scared to drive your Ferrari. But second, the next question would be like, it's insured, right? Like if I crash your Ferrari, like are you covered for this? You're good, you're good. But you don't ask that when you go skydiving, do you? Yeah, and that's what, and we don't ask it every time we go out to work because like the biggest claim at the moment and the biggest cost

for insurance is mental health. Yes. And mental health, we're in an absolute epidemic for mental health conditions. And so that's the thing of going we aren't, you know, life is fragile. You know, there are things that can happen. and we are driving around Ferraris in our bodies. It doesn't matter how big or small our income is.

If you're young, you're driving around a Ferrari. Now, insure that Ferrari. That's the most important insurance. And that's why, you know, you've kicked us off with saying income protection is most important. And I fundamentally agree that that is the number one most important. I'm glad we're on the same page because we could have just made this whole episode a little argument.

And that wouldn't have been nearly as enlightening for our community. Yeah, I mean, that's fine. But like, I think that is so important and I haven't thought about it in the Ferrari analogy. I'm always like, you're insuring your car, but you're definitely not insuring your life. Like I think you've got it backwards. But like the idea that we're all mini Ferraris, absolutely.

I love that for us. We are expensive. We are worth it. I didn't even know Ferraris are $3 million. I don't know either. I've personally never looked into a Ferrari. I'm not a Ferrari guy. I haven't either.

But that at the moment is the most expensive car I can think of. Yeah. Like I can't think of anything. You know what? There are people that are going to be screaming right now in their cars being like, Victoria. This McLaren, this, this, this is more expensive. that is. Well, neither am I. And I think that that's probably a really good place to leave it.

Phil, I need to update my insurances. So we might get onto that. Thank you so much for coming on the show. It is always a pleasure. And to be honest, I just feel like you really do help make this stuff a whole heap less overwhelming. Thanks for having me. Thanks for having me, Victoria. Hey, VD, thank you so much for having me. It's been an absolute joy. I'm not having that edited out. One of the joys of my life is being able to spend time. Actually, I was thinking this on the way in here. This will get edited out, I'm sure. The older I get, the more I appreciate long-term relationships. So I appreciate you. No, I'm not editing that out because it strokes my ego in exactly the right way. I appreciate it. Guys, if this episode has made you think twice about what

you're paying for or what you're not covered for, consider this your reminder to do a little life admin check-in. Your future self is definitely going to thank you for it. And if you haven't already, make sure that you're following She's On The Money wherever you're listening right now so you don't miss the next episode. All information about our friend Phil and Sky Wealth is going to be able to be found in our show notes. So if you want to talk to this guy, you can hit him up ASAP. The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's on the Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy

a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's on the Money are authorized representatives of Money Sherpa PTY LTD ABN 321 649 27708 AFSL 451 289.