In financial planning, I find that there are things that people want to talk about, and things that they really need to talk about.
Over the last few weeks, I have met a few new business owners, and we have spoken extensively about the importance of 'telling it like it is', even when sometimes that isn't what our potential clients want to hear.
Without using names for obvious privacy reasons, I have one recent example that springs to mind.
When I first met Daryl and Maggie (not their real names), they had been referred to me by another professional. We sat down and spoke, and they told me about all the exciting things they wanted to do financially. They had some ideas, and an interesting take on their positions. They also made it clear that they had a bad experience with a financial planner in the past, and that they did not wish to talk about insurance.
When I first started in this industry *profession*, I worked for a practice that specialised in planning, self managed super and insurance broking. I was grateful for the opportunity to get a start in the industry, but after some coaxing from the Managing Director, I told him that I wasn't interested in being a 'foot in the door' life insurance salesman. And more than ever, I still don't.
However, there can be no doubt, that your income is the engine that drives ALL of your other activities. Without this, you can't repay your debt, contribute to super, or invest in property. You don't go on holidays or buy your kids their first car.
To repeat (and it sounds blatantly obvious), but without ongoing income, you don't get to do all of the fun stuff.
So I told Daryl and Maggie that I was down with the fun stuff, but without putting in place a strategy to protect 100 percent of their income, the fun stuff they wanted to do was built on a weak foundation.
It took quite a few meetings, and 3 months to convince them to agree, and then another 3 months to get their cover approved due to the health difficulties that they both had. Finally, it took a few more weeks to convince them to accept the increases in premiums, and the exclusions, and to re arrange how some of the premiums were to be paid, after the insurer finally agreed on what they would cover.
So it was with a sense of sadness, but also relief, when I received a call from Maggie less than 6 months later when she rang to inform me that Daryl had been diagnosed with lymphoma and that she felt she would have to sell their house. She felt this way because even though she remembered that he had income protection, Daryl was so sick, that she had to take time off work and she didn't think her policy (or his) covered that. I explained that we had arranged for sufficient cover to ensure that there was a lump sum available in the event of certain sickness, and that lymphoma was one of these. Daryl would receive a lump sum, and she could use this to fund her break from work, and income protection would cover Daryl's enforced lay off. They wouldn't have to sell their house.
I was grateful that the insurance provider was thorough but swift in their assessment, and paid the claim quickly (and even went beyond what they probably needed to do).
Money, of course, can not in itself help people to recover from sickness or accident, but financial security can mean that when the unforeseen strikes, money is one less (and large) thing NOT to have to worry about.
Does it cost money? You bet. Are there intrusive questions and maybe blood tests? Unfortunately.
Would you regret not having cover after a heart attack, stroke or cancer (and you would be horrified at the probability of having one of these three illnesses)? Probably.
In finishing, I want to reiterate that financial planning, when done properly, helps people to achieve financial goals, with primary goals being to create and grow your wealth. But anyone who remembers Maslows needs hierarchy would remember that after food, water, sex and a few other things on the bottom rung of the ladder, security was an early need that required being met. Being able to sleep at night, knowing that you are protected from sickness and accident, is a real level of security.
A lot of people think that sickness is something that happens to older people, or that covering this is too expensive. Daryl was 41 when he was diagnosed with terminal lymphoma, and not obtaining cover would have been the most costly mistake possible.
As ever, I'd love some feedback. Feel free to comment, or share this with people you know.
Over the last few weeks, I have met a few new business owners, and we have spoken extensively about the importance of 'telling it like it is', even when sometimes that isn't what our potential clients want to hear.
Without using names for obvious privacy reasons, I have one recent example that springs to mind.
When I first met Daryl and Maggie (not their real names), they had been referred to me by another professional. We sat down and spoke, and they told me about all the exciting things they wanted to do financially. They had some ideas, and an interesting take on their positions. They also made it clear that they had a bad experience with a financial planner in the past, and that they did not wish to talk about insurance.
When I first started in this industry *profession*, I worked for a practice that specialised in planning, self managed super and insurance broking. I was grateful for the opportunity to get a start in the industry, but after some coaxing from the Managing Director, I told him that I wasn't interested in being a 'foot in the door' life insurance salesman. And more than ever, I still don't.
However, there can be no doubt, that your income is the engine that drives ALL of your other activities. Without this, you can't repay your debt, contribute to super, or invest in property. You don't go on holidays or buy your kids their first car.
To repeat (and it sounds blatantly obvious), but without ongoing income, you don't get to do all of the fun stuff.
So I told Daryl and Maggie that I was down with the fun stuff, but without putting in place a strategy to protect 100 percent of their income, the fun stuff they wanted to do was built on a weak foundation.
It took quite a few meetings, and 3 months to convince them to agree, and then another 3 months to get their cover approved due to the health difficulties that they both had. Finally, it took a few more weeks to convince them to accept the increases in premiums, and the exclusions, and to re arrange how some of the premiums were to be paid, after the insurer finally agreed on what they would cover.
So it was with a sense of sadness, but also relief, when I received a call from Maggie less than 6 months later when she rang to inform me that Daryl had been diagnosed with lymphoma and that she felt she would have to sell their house. She felt this way because even though she remembered that he had income protection, Daryl was so sick, that she had to take time off work and she didn't think her policy (or his) covered that. I explained that we had arranged for sufficient cover to ensure that there was a lump sum available in the event of certain sickness, and that lymphoma was one of these. Daryl would receive a lump sum, and she could use this to fund her break from work, and income protection would cover Daryl's enforced lay off. They wouldn't have to sell their house.
I was grateful that the insurance provider was thorough but swift in their assessment, and paid the claim quickly (and even went beyond what they probably needed to do).
Money, of course, can not in itself help people to recover from sickness or accident, but financial security can mean that when the unforeseen strikes, money is one less (and large) thing NOT to have to worry about.
Does it cost money? You bet. Are there intrusive questions and maybe blood tests? Unfortunately.
Would you regret not having cover after a heart attack, stroke or cancer (and you would be horrified at the probability of having one of these three illnesses)? Probably.
In finishing, I want to reiterate that financial planning, when done properly, helps people to achieve financial goals, with primary goals being to create and grow your wealth. But anyone who remembers Maslows needs hierarchy would remember that after food, water, sex and a few other things on the bottom rung of the ladder, security was an early need that required being met. Being able to sleep at night, knowing that you are protected from sickness and accident, is a real level of security.
A lot of people think that sickness is something that happens to older people, or that covering this is too expensive. Daryl was 41 when he was diagnosed with terminal lymphoma, and not obtaining cover would have been the most costly mistake possible.
As ever, I'd love some feedback. Feel free to comment, or share this with people you know.
