Not the most exciting business issue to consider, but remember, your circumstances are constantly changing, and therefore so do your needs. Right now you might require improved cash flow, more effective tax structuring options, or just assurance that the fine print associated with a particular product hasn’t changed … thereby helping you to avoid the risk of not being able to receive a payout in the event of a claim!
Our insurance specialists will review your insurance levels based on your current needs and – with access to a wide range of policies and insurance providers – make tailored recommendations to achieve your best possible outcome. So take the time to read through the top ten review triggers below, then have a chat with us about your current cover … especially as it is a cost and obligation free review service offered to all of our clients!
“I HAVE TAKEN ON EQUITY/OWNERSHIP OF A BUSINESS”
If you have business partners then you need a written agreement in place covering succession planning for the business – particularly in the event one of those partners dies unexpectedly. Insurance may be used as the funding mechanism for part of the purchase and transfer of shares/units. If something unexpected occurs can you afford to pay out your business partner’s estate for their share of the business? Or, would you prefer to inherit your business partner’s spouse as your new partner? Would the bank call in all debt with the loss of a key partner or assets they might provide as security?
“WHAT WOULD HAPPEN IF ONE OF MY KEY EMPLOYEES WAS NO LONGER AROUND?”
By definition, key people can sometimes be key to your business. You can insure key people for loss of revenue, costs of recruiting a replacement, and debt protection.
“I’M A SELF-MANAGED SUPER FUND TRUSTEE”
As a trustee of a self-managed superannuation fund the government requires you to consider the insurance needs of the members of the fund on an annual basis. Why wouldn’t you have this reviewed by a professional risk advisor to ensure this obligation is met … particularly as it is at no cost!
“I’VE JUST PURCHASED A HOUSE”
With a new house usually comes a new mortgage.
Can your family manage mortgage repayments without you? Which would your prefer your family to be left with – a home, or a home loan?
“I’D LIKE TO SAVE ON PREMIUMS”
Premium rates change and most companies review their rates on a regular basis – you should too! A review can ensure you are not stuck with a company that is consistently increasing rates above market. It is also important to stay informed of available structuring options. For example, if you pay premiums via rollover from superannuation you only pay 85% of the original premium!
Likewise, product features, benefits and definitions are constantly changing, so you should be reviewing your cover regularly too! Old products can be closed off, and you may find yourself “stuck” with a legacy policy that does not payout on current market leading definitions or claimable events.
“WE’VE JUST HAD A BABY!”
Having children is a primary trigger to take out life insurance … this is when you realise that others ultimately depend on you and your ability to earn an income. Frankly, if you were to die, the financial burden on your partner will dramatically increase. Life insurance can help provide for your partner and your children when you’re gone.
“I’M MARRIED AND WORRIED ABOUT MY FAMILY’S FUTURE”
Sharing your life with someone means thinking about their future too, and what might happen if you incur unexpected medical expenses or you require time off work to assist recovery. Or worse. What happens if you’re no longer around?
Trauma insurance can provide a lump sum to help with surgery and treatment, while life insurance helps your spouse to manage financial burdens such as school fees and outstanding debts.
“THERE IS A HISTORY OF SERIOUS ILLNESS IN MY FAMILY”
You may still be able to take out life insurance if you have a family history of illness. Unfortunately, some hereditary diseases can have a major impact on your longevity and as such insurance companies often load the premium and/or exclude conditions from policies. While this may seem unfair, it is also a primary motivator to take out insurance sooner rather than later in life.
“MY SALARY ARRANGEMENTS HAVE CHANGED”
A change in salary (or shareholding) arrangements can drive revised personal remuneration arrangements for business owners. Changing superannuation funds can have the same impact. It is important to review your income protection cover to ensure you are covered for the correct definitions and the sum insured is linked to your current arrangements.
IT’S FREE FOR FORDHAM CLIENTS!
As a specialist part of Perpetual, Fordham are pleased to be able to offer a review service to our clients … obligation and cost free.
If you would like to discuss your options in further detail, please contact your Fordham Partner.
This publication has been prepared by Fordham Business Advisors Pty Ltd and Perpetual Trustee Company Limited ABN 42 000 001 007, AFSL 236643 (PTCo). Fordham is part of the Perpetual Limited Group. Perpetual Private advice and services are provided by PTCo. This information is believed to be accurate at the time of compilation and is provided in good faith. However, it contains general information only and is not intended to provide you with advice or take into account your personal objectives, financial situation or needs. You should consider whether the information is suitable for your circumstances and we recommend that you seek professional advice. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information.