Security for you and Your Family – Rolf Howard

 

SECURITY FOR YOU AND YOUR FAMILY

I live near a restaurant which before last Christmas served great food and wine, had a vibrant atmosphere and had all the trappings of successful business. That restaurant has not reopened since Christmas and it appears may not do so.

The reason for the demise of this business is not the usual failure to balance income and expenditure, lack of profit and failure of cash flow. The problem in this case is that during the celebrations of a successful year, letting his hair down after hard work and prolonged effort the business owner suffered an unforseen and very serious accident in which he was very badly injured. He remains in hospital. When eventually he leaves hospital he will require months and probably years of rehabilitation.

On the night of his accident the only matter of concern to the family of this man was his survival. As time has gone on many other issues of great importance have come to light. How will he pay for the medical expenses not to mention rehabilitation expenses arising from additional care required in the home and special apparatus? What about the ongoing expenses and liabilities associated with a business that can’t reopen? How will he ever again pay for normal living expenses and costs of caring for himself and loved ones?

In the worst scenario the business will not reopen and fail. The injured man will be bankrupted probably by the landlord with respect to unpaid rent and costs associated with the lease of the business premises or another financier. For the payment of all of the costs of living referred to above and many others he will be dependent upon very limited support from government or his family and friends to the extent they are able.

For friends and family the trauma of the night of the accident has become a protracted tragedy that will play out over many years. The toll physically and emotionally will be significant for all involved.

Many of the worst financial consequences of this disastrous accident could have been avoided by proper estate and financial planning. A power of attorney could have empowered an appropriate and trusted person to engage people to reopen and operate the restaurant. This could have allowed for an ongoing income or at least a period for a sale of an otherwise successful business.

Obviously proper insurance should have been in place. It has become an Australian pastime to discuss insurance passionately after disasters occur. Even the Prime Minister and state premiers ask, after floods and cyclones, whether insurance would have been a good idea.

For the majority of Australians, unlike flood and cyclone insurance, the cost of income insurance is relatively inexpensive. It just depends on how much insurance you want that will be the main driver of what the cost will be.

Of course most of us don’t think a disaster will happen to us. It won’t be me who is badly burnt in a house fire or is one of a small number of people who drowns on a luxury ship that sinks in the Mediterranean Sea. Sure the odds of a personal disaster are low. But isn’t it fascinating how many people think so little of buying a ticket in Lotto or putting $20 through a poker machine. The prospects of success of these wagers are either mind numbingly low or negative.

Insurance is a gamble. It is just like going to the roulette wheel every week and putting a little bit of money on just in case your number comes up that week. The difference with insurance is that for each week that your number does not come up the money paid has not been wasted. It means you have enjoyed another week of happy uneventful life in which you had security that if anything did go bad you and your family were safe financially.

After another Christmas period when the news of personal tragedies has been overwhelming I have determined this year to make a real effort to encourage everyone I know to get proper life, trauma and income protection insurance. A couple of years ago Ben Graham of Owen Hodge Financial Planning sold insurance to his best friend. No doubt Ben was glad for the business. His mate knew he needed it but was probably also glad he could do Ben a favour to help him get his business going. Early last year Ben’s friend was killed. There is no good in the death of a young husband and father. It can only be said that that man left his grieving family with a legacy by which they are financially secure. He could so easily have left a terrible problem.

Please, if you don’t have proper personal insurance cover ring Ben Graham this year and sort it out. If you need a will or power of attorney ring James Kelly or one of his staff. Disasters and tragedies do occur. Lets all work to reduce the impact of these events and circumstances.

Rolf Howard, CEO

---