Are you financially able to support your family if you happened to have an accident and couldn’t work? Would you be able to pay your bills or your mortgage if you came down with an illness that kept you out of work for an extended period of time? Would your family be able to survive financially in the event that you passed away? How would your business survive without you working in it every day?
Most people don’t believe these things will happen to them, but in fact they happen far too regularly. Unfortunately, if you don’t have the right levels of personal insurance in place, you risk getting caught by one of these unforeseen dilemmas.
Here’s a quick look at some of the personal insurance policies you might want to consider using to protect yourself:
Business Expense Insurance
If you were suffering from an illness or recovering from an accident, how would you continue to pay your business expenses? This type of policy can help to cover expenses such as your staff salaries, business rental costs, utilities bills, phone bills, and lease payments.
In the event that something happens to you, having this type of coverage to back you up means your business won’t suffer financially when you’re not there.
Buy/Sell Agreement Insurance
If you are a part-owner of your business and your partner dies suddenly, what happens to their share of the business? Does it automatically revert to you, or does your partner’s family inherit that share, along with their management and financial benefits?
If you have a buy/sell agreement in place, you drastically reduce the risk of disputes about ownership if something like this happens. This type of agreement needs to be legally drawn up and requires the help of a skilled solicitor and your accountant to determine the value of each shareholding of your business. From there, the agreement is funded using an insurance underwriter, so that if anything happens to the other partner or shareholder, the insurance policy can pay out the equivalent value of that share of the business to the deceased estate.
Income Protection Insurance
If you’re unable to work due to illness or injury, this type of policy could cover your loss of income throughout your recovery time. This can be crucial if you have a family relying on your income, as it can help you maintain your financial obligations while you’re unable to work.
Life Insurance
If you pass away and leave behind an unpaid mortgage, business debts or other outstanding debts, how will your family survive financially? By taking out a life insurance policy, you effectively ensure that your family won’t be left with the responsibility of covering your debts when you’re gone.
Trauma or Total and Permanent Disability Cover
Taking out specific insurance policies to protect you against various misfortunes can also be wise. Trauma cover allows you to insure against specified illnesses, such as heart attacks, cancer or stroke. Total and Permanent Disability covers you in the event that you’re involved in an accident or suffer an illness that leaves you permanently unable to return to work.
Regardless of the type of personal insurance cover you’re considering, it’s important to assess these carefully. While having some level of cover can be helpful, it’s still necessary that you’re covered for the right amounts. After all, being underinsured won’t offer the level of protection you’re seeking if something really does go wrong.
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