Whether you’re an ambitious entrepreneur with young children or an older businessman with a live-in life partner, your family’s safety and security are sure to be of great importance to you. Ensuring they have everything they need is probably second nature at this stage, but have you taken steps to ensure they will want for nothing in the event you are no longer around?
The prospect of our untimely demise is not something most of us like to dwell on. However, it’s crucial to have a backup plan in case things don’t go as well as expected, and, in our experience, life insurance is the best backup. It’s especially useful to entrepreneurs, and if you’re not convinced yet, continue reading on to find out why.
The Best Financial Protection for Loved Ones
There are several approaches to consider as far as securing your family’s future is concerned, such as building a nest egg, accumulating liquid assets and investing in property. However, there are drawbacks to all of these approaches that make them less than ideal for most people in most circumstances. Building a nest egg, for example, can take an awfully long time, and if you were to suffer illness or injury before completing the task, all your efforts could be for nothing. Liquid assets such as bonds and stocks are not guaranteed to hold their value, and property market moves are notoriously difficult to predict.
Compared to the alternatives, life insurance is the clear winner when planning financial protection for your family. You don’t have to worry about whether there will be enough money to cover all your loved ones’ needs, and if you choose a reputable insurer, you shouldn’t have to worry about their ability to pay out benefits either.
Safeguarding Business Interests
If you have built a successful commercial enterprise, it’s only natural to be concerned about the future of your company without its founder at the helm. As the driving force behind a thriving business, you cannot easily be replaced, and your backers will be acutely aware of this fact. With a well-thought-out life insurance policy, you can address these concerns from the perspective of your dependents, who, with access to a lump cash sum, will be able to:
● Cover Immediate Business Overheads and Outstanding Debts
● Reassure Stakeholders of the Business’s Continued Good Standing
● Engage the Services of a Specialist Recruitment Agency to Find a Competent Manager
Although none of the above measures is guaranteed to ensure the long-term survival of your business, all of them will at least provide your family with some additional time and help them avoid immediate disaster. With a competent manager and access to adequate financial resources, the business can be expected to do well in the short to medium term.
A Safety Net During Challenging Times
While the primary purpose of life insurance is to ensure that your family is always well provided for, a custom policy with additional cover could offer a more comprehensive solution for total peace of mind. The most common life insurance policy add-ons in Australia are:
Total and Permanent Disability (TPD) – If you’re involved in a serious accident that leaves you permanently disabled and unable to work, the lump sum from this add-on could prove invaluable.
Critical Illness/Trauma Insurance – If you receive a critical illness diagnosis such as cancer, this add-on will ensure that you have a nice lump sum to help you cope with the news and adjust to your new reality.
Income Protection Insurance – This add-on does exactly what you would expect: replace your income in the event you are unable to work due to injury or illness.
With these add-ons, a simple life insurance policy becomes a sturdy financial umbrella, capable of protecting both you and your family in the event of a rainy day.
Tax Advantages and Financial Planning Benefits
Standard life insurance premiums are not tax deductible in Australia, but income protection insurance is. This means you could potentially lower your annual tax burden with the right type of policy.
As far as financial planning is concerned, a well-designed life insurance policy is an essential component of any balanced portfolio in the opinion of most industry experts. Life insurance with generous benefits is of particular value to entrepreneurs still in the process of building personal wealth. It can serve as a safety net until you are able to accumulate enough assets to handle any eventuality by yourself.
Closing Thoughts
Life insurance can help you ensure that your family is well looked after in the event of your sudden passing. It has the added bonus of providing your business with a certain degree of protection too, making it the best solution for highly-motivated entrepreneurs and busy executives across Australia.
