Should you Invest in Personal Risk Insurances?

by | 21 Jun 2021 | Business & Corporate, Insurance, Personal Risk Insurance

“Dad under 40, passes away leaving behind a wife & young kids.”

I had a client a number of years ago – only in his 30’s, was doing well for himself in business. He was one of those blokes that ordered the grilled fish & salad when everyone else ordered battered & chips, exercised every day and was fitter than most.

At the office one day, he gets a blinding headache, so decides to jump in the car for a quick drive home, so he could sleep it off. Whilst in the shower, he collapses; his wife finds him not long after and gets him to hospital. Less than 24 hours later, she had to start organising his funeral and tell their little girls why they wouldn’t see Daddy again.

Sounds shocking, and as humans, we all tend to think “that only happens to other people”. Unfortunately in the last two years, at STAC Capital we’ve seen another two young families face the same horror.

Is personal risk insurance a waste of money?

Life insurance is one of those things that usually generates an innate response, either “it’s a waste of money” or “that only happens to other people” (also “I’m not planning on anything bad happening to me”, or “but I’m fit and healthy”). Hopefully, nothing will ever happen to you or anyone in your family, but unfortunately, the reality is that it does happen to people and none of us gets to choose.

If you think about it for a second, it’s kind of crazy that everyone insures their car without question – and yet, the personal financial impact in having a car crash is usually tiny compared to what happens when the major family breadwinner passes away, or can’t work for an extended period. Even if you think your partner could afford to go on just fine, would they really be in a state of mind to continue working full-time, or would you want to (or be able to) turn up to work at your normal hours if you suddenly had to go through chemotherapy?

Personal insurances should be essential for every person, whether you’re an employee or a business owner.  The key, as always, is to get a professional with the right experience and the right values in your corner. Calling an infomercial number after seeing an ad on TV, or relying on a generic retail policy, is probably not be the best move for people who want quality cover at the right price.

Ask yourself the following questions:

  1. If I were to pass away or I could no longer come to work, can my family and/or my business carry on (short- and long-term) without any impact?
  2. If you have a business partner and something happened to them, does the business have enough cash to employ a replacement to do their job, and am I happy to have their spouse at the boardroom table voting on strategic business decisions?
  3. Are you confident that your current insurer has a good track record of paying claims?

If you’ve answered “No” (or “umm, not sure”) to any of the questions above, we strongly encourage you to talk to an experienced personal risk insurance professional.

At STAC Capital we are NOT experts in Risk Insurance or Succession Planning, but we are more than happy to put you in touch with professionals whom we trust, that have solid experience with individuals/families, business owners and businesses.