Personal & Business Risk Insurance
Most families and businesses are carrying significant financial risk should the unexpected happen. The big question you have to ask yourself is:
‘Would your family be able to maintain their lifestyle if you no longer earned an income?’
And, if you own a business:
‘Would your business be able to buy a departing owner’s share of the business if they died or suffered a serious illness or injury?’ And:
‘Would your business be able to cover the loss of revenue and goodwill, and re-pay the debts of the business, if an owner or other key person died or suffered a serious illness or injury?’
If your answer to these questions is no, you need to consider transferring that financial risk to life insurance companies. They have a range of insurances which can help you fund your risk mitigation plan and give you enormous peace of mind – all for a small fraction of the sum insured each year.
Personal Risk Insurance
Personal Risk Insurance isn't just for if you lose your life... it's also for if you lose your ability to earn an income. The key to creating an effective personal risk insurance plan is to visualise what a secure financial future would look like for your family if you were to die or could no longer earn an income. It must take into account many issues, including ongoing living expenses, repayment of debts, and special expenses like schooling. It might also take into account the financial cost of fulfilling the aspirations of your dependants and other people close to you. And, if appropriate, your desire to leave a philanthropic legacy.
In the case of you suffering a severe illness or injury, you should also take into account the potential cost of hospitalisation, surgery, medicine, rehabilitation and home nursing costs. You should also consider the possibility you may need to make modifications to your home to make it easier for you to get around.
Personal risk insurances to consider include:
Life insurance - pays a lump sum on the death of the insured.
Income protection insurance - replaces your income if you are unable to work due to sickness or injury. It provides a monthly payment of usually up to 75% of your pre-tax income.
You can generally choose the waiting period (this is how long you must be unable to work before the insurance begins to pay you) and the benefit period (how long the policy will pay you if you are unable to work).
Trauma insurance - pays you a lump sum on the diagnosis of a specified non-pre-existing illness or injury, generally including heart attack, stroke, cancer, and paraplegia. This can be taken as a stand alone policy, or attached to a life insurance policy.
This insurance was created when it was realised that medical advances were resulting in patients increasingly surviving major health problems, but that the financial cost of survival was prohibitively high for patients (e.g. medical costs, medicine, time off work, rehabilitation etc). In other words, patients didn't lose their lives... they lost their life savings instead.
At Steinfort Financial, we help you define your vision of a secure financial future for you and your family – and then help you to calculate how much money you’ll need to fund that vision – if you die or no longer earn an income due to serious illness or injury. We’ll then assess if you can afford to self-fund your vision, or whether you need to consider transferring some or all of that financial risk to an insurance company. It’s all about protecting your family from unnecessary financial duress.
Our job then is to research the major, reputable insurance companies to find the insurances which provide you and your family with the right level of protection, including the definitions, clauses and exclusions which best suit you. Of those insurances which meet your needs, we obtain quotes to ensure we recommend the most cost-effective products.
Business Estate Planning
Business estate planning is the process of arranging your business affairs now to ensure there is no unnecessary deterioration or loss of continuity in your business should it lose you or one of the other owners or other key people through illness, injury or death.
It should also give the continuing owners the right to buy the interests of the deceased or disabled owner, and ensure that the departing owner or their estate will be fairly compensated for giving up their rights to the business. In this way, a business estate plan provides all owners and their spouses and families with legal certainty should the unforeseen occur.
Your business estate plan is also concerned with ensuring your business has the financial resources to fund the plan.
We can help you create an estate plan which will ensure you and your business will be financially cared for should the unexpected happen.
Buy/Sell and other business insurance
Business insurances worth considering include:
Buy/Sell insurance - pays your business a lump sum if you or one of your partners dies or suffers a serious illness or injury.
Key person insurance - Pays your business a sum of money to offset the estimated financial loss to the business should an owner or other key person die or suffer a serious illness or injury.
Business expenses insurance - pays some of your business' expenses if you are unable to work due to illness or injury. Expenses are generally covered for up to 12 months and typically include rent, loan repayments, leasing costs, and utility costs.
At Steinfort Financial, we take the time to understand you and your business – your situation, your needs and your aspirations. Then we help you define your vision of a secure financial future for your business if it lost you, or a partner or other key person. And then, working side by side, we will create a risk insurance plan which will enable you and your business to be financially cared for should the unexpected happen.
We then research the major, reputable insurance companies to find the insurances which provide your business with the right level of protection, including the definitions, clauses and exclusions which best suit you and your business. Of those insurances which meet your needs, we obtain quotes to ensure we recommend the most cost-effective products for your business.