I have been running my own engineering business for 5 years and nearly 50. I have life insurance but a few people have suggested I should really be looking at business and income protection. I would like to get some advice on the insurance options I should look at?
I would expect that these issues all probably apply to you:
1: major breadwinner in family
2: massive mortgage
3: business would collapse overnight without you running it
4: kids/schoold fees/lifestyle costs
5: without your income everything goes down the gurgler.
Soooo, if you say yes to even half of these, you need to look at risk management!!!!! One way to manage risk is to ignore it (ie self-insure) but that only really works if you dont really need the income anyways.......another is to get the right amount of cover so you and your family dont end up living under a bridge eating road-kill. (well, thats maybe a bit of a stretch, but you get what I mean)
Find someone who will have a look at your whole picture and give you advice on what you need and what you DONT need, and help you find a way to fund it without going broke, because it aint cheap!!!
Great questions - Challenging ones to answer however!
Insurance is a bit of a necessary evil for most of us and pays to put in the time and effort to ensure you have what you need and aren't paying for something you don't. Life insurance is common if you have debt, dependants, will leave behind other liabilities etc With that in mind, ensuring you have appropriate business insurance and an asset protection strategy is also key. Income protection (protecting your ability to earn an income) is something we all should consider (there are several types which can be held either inside or outside your superannuation - or both) however, depending on the structure of your business, you may also need "key man" insurance, or buy/sell cover if you are working with others who own equity in your business.
Its difficult to give you much guidance without having more information as this insurance is very much an individual strategy and what you need/works well for you, might be the complete opposite of another business.
Our head office is in Circular Quay so feel free to reach out to me directly and will be happy to jump on a call together.
I agree with everything that had already been said.
Life insurance is typically the cheapest of the personal insurances because statistically it’s the least like one you’ll actually claim on.
Your not alone in just having life insurance - plenty of people do. But especially running your own business, an extended period off work without an income could derail your personal finances as well as cause the business to fall apart around you.
Best to talk through your options with a financial adviser who can make some recommendations for your situation.
Happy to chat on the phone if you like.
03 9909 5800