THE “FORGOTTEN” INSURANCE

With all the current issues and media about Accident / Health Compensation, it may be timely to assess your personal health protection and risk management.

As business people you will regard insurance protection as a necessity. An obvious first step is to insure and protect your physical assets buildings, plant and motor vehicles. You will also insure your personal home and contents.

In the event of damage or loss to that property, insurance can put you back into business and therefore financial hardship is eliminated or reduced dramatically.

A less obvious and often less considered risk is that of your own personal risk from illness or injury which can have an equal or more negative financial impact on you, your family and business partners.

Here are some statistics:

• ·         most people will be away from their job / workplace for an extended period due to illness or injury before the age of 65
• ·         most new Zealanders can only survive up to a month on their savings
• ·         many business do not have the luxury of having personal assets separated as they use home  equity for business debt
• ·         2% of people lose their home by fire
• ·         7% of people lose their home through inadequate or no insurance as a result of death
• ·         91% of homes are lost through people suffering a medical trauma, accident or injury and being not insured or inadequately insured to survive.

In addition to this, consider what could happen with death / injury / illness to a business partner:

• ·         Buy / Sell agreements – do they work / do you have one?
• ·         Partners / family members may by default become your new partner (do they have the skills / will you get along with them?
• ·         Has the business be valued (if not, legal battles ensue)

Many people have the perception that they ‘will be right’ as ACC will cover them should something happen. Some more statistics:

• ·         Cancer, Heart Conditions & Stroke are the three leading causes resulting in prolonged time off work or death
• ·         ACC does not cover these
• ·         Accident and injury claims are only about 4% of claims

Protecting your business, key people and family by having the right insurance and agreements in place that suit your business in the event of death, illness, accident or injury will ensure that the success of your business can continue and that your family and loved ones will not suffer hardship or loss at what is a stressful time.

So have you ‘Forgotten’ this insurance or has it been awhile since your last review, if so it may be time to discuss both business and personal risk with a life insurance advisor.

This article was provided by Cheryl Newcombe, Life Advisor with I C Frith & Associates