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.