Farmer's Income Protection What Are The Choices?

Farming is a high risk industry, and income protection plans may have hooks and clauses that are not seen straight away.

Excerpts from a blog post on this topic.

"What is your plan of action likely to be if you were faced with a prolonged period of time off work? Here are soe questions to help you find the answers you'll need BEFORE you decide what to do with Disability Income for Farmers.

1) Do you own the farm?

2) Are you in a position to make a decision about selling or keeping the farm in the case of long term disability?

3) If you received a claim for Disability from an insurance provider, would you accept these restrictions?" See complete post by Neil Smith Insurance Adviser.

A disclosure statement is available, upon request and free of charge.

Scottish Marathon Runner Suffers Heart Attack, and Lives To Claim

New blog post at Life Risk Blog.
http://www.liferisk.co.nz/blog/2010/02/scottish-marathon-runner-suffers-heart-attack-and-lives-to-claim/

Do you have life cover only? Or do you have peace of mind?
And how can you know what your finances would like in 7 potentially disastrous things happened to yours or your spouse' health and well being due to accident, illness or death?

Find out here.

A disclosure statement is available, upon request and free of charge.
P.S. none of the people in the picture had a heart attack - as far as I know.

New Blog Location

http://www.liferisk.co.nz/blog

Income Protection Insurance Where Do I Get Advice?

Where do you find advice about Income Protection Insurance options?

Sorted.co.nz the Government site on personal financial matters would say that your "Financial Adviser" is a good source of information about investment advice, but it has little to say about Life Risk Insurance Advisers. They are those Advisers that advise on the financial effect of Life Risks like premature death, becoming disabled, meeting with a major health trauma etc. If you need advice about Income Protection, where do you turn? A Life Risk Insurance Adviser

Some myths and concerns have developed over time about Insurance Advisers, and I am going to deal with them in a series of short posts.

Concern #1
The Adviser was digging ditches last week and this week, insurance sales.

I suggest you ask your Insurance Consultant or Life Risk Adviser how long they have been in the business of life, disability and health insurance sales. Ask them what their background was before that. Ask them if they own their business, or if they are employed.

Many Insurance Advisers are self employed contractors to the owner(s) of the client base. This may mean that when they may split off from with the company they are with, they may have to pass on the relationship to another Adviser. When I set up Life Risk Limited, I bought back some of the relationships I'd sold to the company I was working with when I joined them. I bought out some of the relationships I've developed on that company's client base, and I left some of the relationships behind.

Sometimes I'll see clients I left behind, but they understand that the 20 year relationship they've had with that organisation is more important to the company than the relationship we developed in the 5 years I was looking after them. Not one of them has not accepted that their current Adviser company wants to keep them. That is a sign they are being well looked after I expect.

I've now set up my business so that I don't have to say goodbye to clients.

As part of my serice, my website www.LifeRisk.co.nz has an increasing number of common questions answered in articles, audio and video downloads. This is another way I am offering clients a helpful financial education.

As the Financial Advisers Bill becomes law, and people settle into life with KiwiSaver, some Advisers will begin to offer an easy to understand financial education at the workplace, and over the web. Why? Because we're in the business of advice, Life Risk Insurance Advise and KiwiSaver and Retirement Planning Advice.

Come on a journey of learning with me. I've been in the Life Risk advice business since 1998. That's why I started Life Risk Limited in 2006. Along the way, I'll help you with your Life Insurance and provide advice about KiwiSaver as well.

Neil Smith is the owner of Life Risk Limited, Life Risk Insurance and KiwiSaver Advisers.
A disclosure statement is available, upon request, and free of charge.

I've set up a poll on the topic of Income Protection. Please visit it here. The link takes you to another page at LinkedIn.com

How Safe Is Your Life Risk Insurance Provider?

How Safe Is Your Life Risk Insurance Provider Anyway?

This special report was put together in the wake of AIG in the America coming under the international spotlight. It is important to realise that AIG Life New Zealand (American International Assurance (NZ) is financially safe at the time of writing this report.

This special report is designed to give you a better understanding on how
life risk type policies work. The type of cover I am referring to is; death
cover,critical illness cover, disability income cover, and medical insurance
cover.

Question 1
I have an existing cover in place, will I loose this cover if the company
I am insured with goes out of business?

No is the short answer. In the past we've seen many insurance businesses
change ownership, and a your plan will have a guarantee of renewal of the
plan until a certain date. The minimum period of such contracts is 5 years,
but yours is likely to last longer than that. Cover remains in place as long as
you pay the premium within that guaranteed period.

Questions 2

If I keep paying an existing policy right now will I lose the premiums?

No. The only way you can 'lose' the benefit of the premiums is if you make the mistake of allowing your policy to lapse. You will then lose the value of your
policy being a 'guaranteed renewal' contract.

This would be a very dangerous thing to do as you may be unable to apply for
insurance later if you develop a health problem in the meantime or if your health
is not as good as when you took out the policy.

Your existing company would need to fail outright, and the New Zealand and
Australian market is very unlikely to let any insurance company go. They are

much more likely to take the policies over.

Question 3
What if I happen to be in the middle of a claim? Will I lose the
ability to continue on with that?

All of the life insurers in New Zealand I recommend my clients deal with use
reinsurance. This is insurance for the insurance company. Part of the cost of
your claim is paid by another company to you insurer, and then passed on to
you as a claim payment.

The companies I recommend are also established operators in Australia as well. They are big companies that have vast experience. They have solid credit ratings
and are easily sold to another insurance company.

Even AIG Life in New Zealand still has an A+ credit rating from Standard and Poors* as at Tuesday, 17th September, 2008. Its parent company has had some issues but its parent company is not directly funding claims in New Zealand. The contracts made in New Zealand are funded by insurance and reinsurance funds arranged in New Zealand. (*Standard and Poors A+ negative outlook).

Question 4
If another insurance company takes over my policy can they change
the terms I currently have?

NO - they are bound by the terms of the existing contract, including your current acceptance terms. Some contracts even have guaranteed premium rates for their
life insurance. Otherwise they can change the premiums if they wish to. When Colonial was bought by prudential and soon after by Sovereign which is owned by ASB Group, nearly all of the insurance contracts, bar a few Colonial contracts were kept the same, and premiums have not altered much.

If you have any questions about your Life Risk Insurance, or want to know about a Life Risk Limited Lifestyle Check, please call Neil Smith on 027 489 6141 today.

A disclosure statement is available, upon request and free of charge.

Do you understand your existing life insurance lifestyle protection plan?

Is your disability, health and life cover life risk protection a mystery to you?

Ever had that vague feeling that things have changed since you took out the cover you currently have in place? Have you really looked at the relevance of your cover since things have changed?

If there would be a major financial loss as a result of a major traumatic health event, you'd want to know how much money might be lost wouldn't you? But if your financial circumstances have changed and no one has looked at the potential loss from major life risks how can you know what the loss would likely be?

How do I know if the changes in my life are significant?

How about a random check list to jog your memory?

“I've had a baby recently”

“I’ve taken on a staff member”

“I’ve got business coach adviser now”

“I’ve moved house and taken on a bigger home loan / mortgage”

“I’ve got married or similar”

“I’ve converted my business into a company”

“I’ve gone into a business partnership”

“I’ve begun to pay myself with PAYE”

“I’ve had a pay rise”

“I’ve taken on more stock and needed a business loan”

“I’ve borrowed money against the house for the business”

“I’ve been promoted”

“I’ve started a new business”

If these items ring true for you, ring me on 03 323 4241. Lets talk in the New Year.

A disclosure statement is available, upon request and free of charge.

Survey Results 44% Didn't Think Of It.

Yesterday I attended the 10th birthday celebrations of Mega Advertising – powered by Pinnacle Design. The founder, Philippa Jacobs, like 44% of the respondents to the recent Life Risk Limited Starting Up Business poll did not think of protecting her income when she started her business – there was none. Nicky Wagner is a Christchurch business icon of some 25 years business experience. She is now National MP for Christchurch Central and she sums up the poll results by stating, “I don’t think many people think of insurance when they start their businesses - they are generally cash strapped and optimistic two factors that don’t favour insurance.” This is very true and I liked her comment so much I thought it worth sharing with you.

What Philippa Jacobs of Mega Advertising discovered was that a personal income protection plan is essential for a business owner, and it is much easier to get one going before you are self employed, than after you start out on your own. In preparing for her business’ 10th birthday celebrations she counted up the client numbers, they had 999, as of Wednesday 5pm. Does she still need insurance with client numbers like that, and good staff to get them there? Philippa reminded me recently, “Neil, I haven’t needed you - but wouldn’t do without you. Peace of mind is an amazing thing.” I guess her reliance on the cover I helped her put in place speaks for itself.

These are the full results of my survey on business start up people and their attitudes to protecting income. The final day for polling was December 12th.

44% Didn’t think of or wouldn’t think of protecting their income when starting up a new business. 33% thought of it and didn’t do anything about it. 16% said they wanted to do something about it. 11% said they had done something about it and were glad. This does not add up to 100% and the poll allowed more than one answer, for example you could say, I didn’t do anything about it, and I want to do something about it now.

What will 89% of business owners do to address the very real Life Risk that is facing them? Will their assets and family recover after their health recovers? In the event of a significant life event health tragedy or illness, how long could your business survive on cash reserves and customer/supplier goodwill before the cash flow and profits dry up?

A staggering 51% of males will suffer a critical illness before the age of 70* Perhaps that is because they drink too much and eat steak at BBQs, you think? Well 33% percent of females will suffer critical illness before the age of 70*. So what are some of the financial risks associated with these statistics?

The four most common risks to a business owner are:

You’re the boss

The buck stops with you. For example, its your name on that commercial loan agreement and you’re ultimately responsible for the repayments and any other liabilities - making sure your business commitments are met. When a disastrous health life event strikes you who can you turn to? (A hint, the bank may not be sympathetic as they will be at risk too).

Covering your costs

When you are unable to work due to sickness or injury or the ultimate degeneration in health following a previous injury, you’ll still need to ensure that your ongoing business expenses are met and debtors paid. Will you be able to achieve any level of business continuity to keep your customers happy and your reputation intact? If not, how will you make sure you can achieve that or replace the money that will help pay your monthly bills at home, mortgage payments and preserve your family’s lifestyle.

Relying on others

Most businesses have a person or persons that you can't get by without. They have special skills or knowledge without whom the business may struggle to operate effectively or even survive. Do you think you can rely on ACC to help you with replacing your key person as well paying you?

Lack of planning

Business Coaches and Business Advisers tell start up business owners to look at how they will get out - gracefully. Without a plan, should the need to get out of your business suddenly come upon like a swarm of bees in the forest, due to illness or accident, the future of your business may well be at stake. Preparing an alternative income for yourself in the form of insurance be it a Start Up Income Protection type solution or an Income Protection plan for those that have one or are able to get one, is step 1 in the right direction.

* Source: GenRe LifeHealth Australia, 2005

33% of those that responded to the poll had thought of income protection, but had not protected their income. Are you like that too? Call Neil Smith on 03 323 4241 right now.

I’ve mentioned two people in this article. Here is how to learn about them. Click here for MegaAdvertising - powered by Pinnacle Design. Click here to discover what Nicky Wagner is up to.

A disclosure statement is available, upon request and free of charge

Options for Trades People and Farmers

No one ever took out a Life Insurance policy without hoping to be paid if the need arises. So it is when it comes to replacing a person’s income in the event of sickness, the most important part of the contract is the income, right? For self employed Trade’s People and Farmers, this may be the start of the problems. That is why there is now a developing market catering to these people in New Zealand.

In the past insurance contracts that were designed to replace income were designed on overseas models where there are lot more employed people than there are here in the land of the business “Do It Yourselfer”.

For the Trade’s person, or Farmer the real need is for a simple formula of payment when you are off work fully, and a simple formula when you are back to work part time. Traditional Income Protection products will not achieve this. Until recently there was actually very little available in the market in New Zealand to fulfil both those requirements but now there is.

For small businesses, of 4 staff, plus the insured person, (5 including yourself) you can get claim money from the insurer paid to you, which you can use to suit your needs. You can pay staff and continue to draw an income from the business, or you can stop the business and take the money, which is under current law, tax free at claim time.

AIA (AIG Life) have a contract that looks and feels like similar to that, but it does not pay if you are off work only part time. The AIA (AIG Life) Key Person Benefit is extremely good, and I work with AIG Life, but this is not what I am referring to here.

If you know someone who is a self employed Trade’s Person, or owns a Rural Business and operates as a Contract Milker or Farmer please pass on this article and have them contact me. You can call me on 03 323 4241 , ask for Neil Smith or have them reply this email (if you received this as an email).

Everyone wants to know that they know what they will be paid if they require insurance to replace part of their income due to sickness. Not everyone’s income protection plan can guarantee that for a number of reasons. But there are answers out there. I’m available to talk about them and implement them as well. I work as Financial Risk Adviser.

A disclosure statement is available, upon request and free of charge.

Starting or Started a New Business?

Starting a new business is challenging enough, without having to worry about how you'll cope if you're unable to work, due to illness or injury. Do you know people that have started a business recently? Maybe you have. Did you notice how focused they are on getting their business systems set up and their message out the door? Is it any wonder, with the number of small business people in New Zealand? The problem we all face in starting out on our own in a full time self employed venture, or buying into an existing business is that we forget that their new venture could come crashing down around their ears, should their health fail.

Of course there are plenty of people who have thought of protecting their income, and get as far as thinking… “Hold on a moment, there is no income to protect? I’m not making anything to speak of here yet?” Wouldn’t it be great if we were less at risk as a result of our not making much money in our business? That would solve a lot of problems. But finances don’t work that way, of course.
Some people starting out in their new business are content to rely on ACC. If you live in New Zealand, which is where I work, You’ll be aware that ACC is the no fault accident compensation plan that covers, violent, visible, external, non gradual injuries and some work place stress. That’s quite an impressive list I know, but that is the way the law works here. The key to ACC is that you will be paid if your injury for a period of time, but expect it to be a short period. Also, expect ACC to only “respond” to your request for money if you qualify. It is not a catch all to replace some of you income in the case of all sicknesses.

So where do you turn? If you have no real income at the start, but want to have some protection what is the best choice? That’s the question. Until the last few years there was little or no choice. An overview of what is available is the content for another article. If you wish to discuss this with me my contact phone number is 03 323 4241 - just ask for Neil Smith.
This is an article from Life Risk Limited. http://www.liferisk.co.nz

A disclosure statement is available, upon request and free of charge.

Welcome to Financial Protection for Growing Businesses and Families

Welcome to the Neil Smith Life Risk Limited Lifestyle Protection articles page. In this page New Zealanders can learn how to limit the financial risks that we all face when our health begins to fail.

This site will investigate relevant medical trends and insurance solutions that offer you or your business cash to ward off creditors and help you pay your bills to keep your lifestyle and/or business afloat.

A disclosure statement is available, upon request and free of charge.