Professional people need their own life insurance adviser and here's why

2016-10-02

Professional people with chronic health conditions need their own life insurance adviser

Many people in professional business use life insurance products but ...

...what do you do when your business partner tells you 'the business needs to get life insurance in place to cover the business debts', but doesn't know you're HIV positive or have been diagnosed with diabetes? What happens if you can't get insurance cover? What do you do when your employer or business partners needs to take a policy out on you because you're a Keyperson to the business and responsible for significant amounts of the company profits?

Are you in business with a pre-existing medical condition?

This is the uncertain situation that many business owners or professionals in partnerships like solicitors, accountants, engineers and even software designers face today. 

These types of insurance cover are often required by a bank (or Shareholders) who are providing a loan to the business or investing in the company. Funding is usually provided, upon the assumption that the business cash flow is stable and its key people, (those usually responsible for the majority of the revenue), are stable and able to continue to work.

  • In this situation, the life insurance question can pose a difficult reality for people diagnosed with chronic health conditions.

Key people and how to protect their value to the business

Some businesses rely heavily on just a few people to generate the majority of their profits. These people are called key persons. Insurance to cover them is called key person insurance.

Businesses regularly use life insurance products to protect the revenue generated by a key person. In case the key person is unable to work due to sickness, injury or even death, the business revenue is insured.

Using private homes to guarantee business debt

Business owners and Shareholders often use their private homes to guarantee business debts. Business debts are usually considered 'at call'.  This means debts can be called in and cancelled at the banks discretion. 

Because of this risk, most small business owners need to use life insurance and medical crisis insurance to help protect their families from losing their home, should a bank call in the business loans because a business owner has become sick or passed away unexpectedly.

Pre-existing medical conditions. small business and partnerships

The reality is that people with pre-existing medical conditions don't usually mix personal issues with business life. So they face a difficult dilemma when they are required to submit to an insurance application on their life because they are a key person to a business, a business owner or in a partnership with others.

Disclosure and employment challenges in real life

We were contacted by a positive client some time ago who found themselves in a similar situation. Rather than submitting to a life insurance application through their employer and risk disclosure, they resigned before the application could take place. 

  • This was a terrible situation for the client - who previously walked away from a stable and lucrative employment position, and
  • A significant loss for the employer - who never got to know the reason for the sudden and shocking depart of one of their technically expert new hires.

This situation could have been avoided had the client known about our services ahead of time and had the opportunity to say, 'I have my own financial adviser who can take care of all that for you'.

A better solution to dealing with uncertainty

Unusualrisk.com.au is an online pre-assessment service that helps people with well-managed HIV or diabetes get their life insurance sorted.

Because only you should get to decide who you disclose to

What you may not know is that once a pre-assessment is completed, any financial advice is provided separately by your own dedicated senior adviser from their parent company, Sapience Financial and Investment Services.

This means that nobody but you and your adviser will ever need to know that you used the unusual risks pre-assessment service. You simply become a normal VIP client of Sapience, with full access to all the resources of a modern financial services practice, who understands the challenges of modern life.

Nobody but you and your adviser will ever need to know about your health position.

  • Employers get what they want - insurance on the life of one of their key people and you retain your right to complete privacy.
  • Business partners and Shareholders get what they want - protection on their investment in a business should one of the business owners or partners suffer significant sickness, disability or even death.

Click here to get in touch with us today if this is something you'd like to talk about confidentially.

If you have a friend who you think might like to know about our services, send them a link to this blog article.

Drew Browne

Drew specialises in helping people protect and provide for what matters most in their lives. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His company Sapience Financial and Investment Services is committed to using business solutions for good in the community, is a member of the international B1G1 Business for Good Giving Community and in 2015 certified as a B Corp. In 2017 Drew was recognised in the inaugural Australian Westpac Businesses of Tomorrow national awards. Drew writes for successful Small Business Owners and Entrepreneurs at Smallville, his blogs can be read on Amazon.com and you can connect with him on LinkedIn.