Many businesses are heavily reliant on the business owners, and if ill-health strikes it can take a toll on the owners, and the business.
Take the story of Rory and Hamish, who jointly own and operate a small business. Some years ago, Rory was unable to work for an extended period of time due to an illness. He had income protection insurance, which financially supported him until he returned to work.
Then the unthinkable happened. AdviceFirst Adviser Peter Chote takes up the story: “Hamish was diagnosed with cancer. Rory was running the business alone, and with the added responsibilities and duties associated with operating the business without Hamish working, Rory became unwell again and unable to work. Both business partners were unfortunately unable to work due to their illnesses for an extended period of time and as they both had income protection cover, they were assisted financially. They eventually returned to work but, in a cruel example of history repeating, Hamish’s cancer returned so he had to take time off for treatment, triggering Rory’s illness.” As you can imagine this has placed growing pressure on the future of their business.
While recovering, Rory, Hamish and their families, received the benefit of their respective insurance cover. The insurance provided vital financial support that helped relieve the financial stress in their respective households during this difficult time.
Peter says “This story shows the importance of thinking about the risks to business and family if illness prevents you from working. It’s also a lesson that it’s essential to keep insurance going over the years – and to review the type of cover and level of cover regularly so that you can make adjustments as life and business change. That’s what these clients had wisely done.”
It’s vital to consider the possible scenarios that may affect you and your business and the impact it would have on your family and business. Understanding the terms and scope of insurance cover available is important too.
Talk to an experienced adviser to put a plan in place, if you haven’t already got a plan, or to review your existing plan if your circumstances have changed.
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