Risk & Insurance

Why You need a safety net

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We often do not think twice about home and contents insurance or covering the family motor vehicle for damage and theft, but we tend to ignore the consequences of illness or injury and a potential loss in income?

 

If you, and your spouse, are not currently 'financially independent' - that is, if you have a mortgage or debt and you rely on you personal income to finance your lifestyle - you need to seriously consider the consequences of illness, accident or worse, death or total and permanent disablement and the effect it can have on your lifestyle financially if it were to occur.

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We believe risk insurance plays a key part in all advice. Effective planning requires you to keep contingencies in mind, and to be equipped to deal with life's 'X factor' events. Insurance is effectively a means of transferring risk from an individual to an insurer. Having the appropriate insurance in place provides confidence and peace of mind knowing you are protected.

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Our role as your adviser:

1. To identify your risks and contingencies (plans) if a possible 'X Factor' were to occur.

2. Then assess and quantify these risks in line with your desired outcomes in the event of certain eventualities occurring.

 

Our comprehensive software packages allow us to analyse your circumstances and identify the risks, from there you decide which risks you wish to cover and to what extent.

We then analyse the policies available in the market and as we are not aligned to any banks or institutions we are able to select and recommend the policies most suited to your needs. not ours.

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There are 4 main types of personal risk insurance:

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• Term Life Insurance – provides for a lump sum payment in the event of death for a specified period of time.  Most commonly, Term life cover is taken out to payout debts, and to provide capital for the surviving partner to maintain a level of income for themselves and/or dependents.

 

• Total and Permanent Disability Insurance – provides for the payment of a lump sum in the event of Total and Permanent Disability.  The definition of what constitutes Total and Permanent Disability can vary between insurers but there 2 main definitions in the marketplace.  The “Any Occupation” definition requires that the insured person be (after an initial qualifying period of 3 or 6 months) unlikely to ever work again in any occupation.  The “Own occupation” is similar but it only requires that the insured is not able to work in the area that they have been specifically trained.

 

• Income Protection Insurance – provides replacement income protection insurance, in the event of illness or injury, up to a maximum of 75% of pre-disability income. Benefits are paid after serving a waiting period, up to a specified period of time or until the insured is able to return to work.  There are variations in the definitions of Total and Partial Disablement in the marketplace.

 

• Trauma/Crisis Insurance – provides for a lump sum payment in the event the insured is diagnosed with a range of illnesses, typically they would be conditions such as heart attacks, stroke, and cancer.  Usually there is a waiting period attached to claiming on a range of illnesses specified in these policies and also there are variations across insurers as to what constitutes an insurable event.

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As advisers we put ourselves in a position where we have an accurate picture of your financial circumstance, your assets, your liabilities, your income and your current cost of living. Through our education, you will be in a position to understand the implications of the different levels of insurance available to you. It is up to you to decide to what extent, if any you would be comfortable having insurance for. 

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Our contingency plans, once established, should be reviewed annually to ensure your cover remains appropriate and affordable.