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We insure our cars, houses, speedboats etc. without any hesitation whatsoever, but so many people fail altogether to insure their most prized possession – their life. Similarly, when we insure our cars, boats etc we do so at a level whereby we can replace such items for at least the same value if not higher. I know you cannot replace life, but you can ensure the ones you leave behind will, as close as possible, be left a life that is comfortable and secure. This is how proper protection planning can eliminate the financial element of the trauma of losing a loved one and give you and your family peace of mind in the fact that they are protected. This is a morbid subject but probably the most important element to your financial planning for both individuals and corporate clients.

You may be fortunate that your Company provides some protection benefits. However, what if you leave and the next company you work for does not provide such benefits. Even if you do not leave, Corporate Employee Benefits are always the first to suffer in today’s harsh business environment. Many employees do not know the level of their cover entitlement and whether it will cover them outside of work or on leave. Bottom line, it makes sense to make some private arrangements since insurance gets more expensive the older you become.

Protection has many forms; Life Insurance, Critical Illness Cover, Income Protection, Hospitalisation Benefit, Medical Cover, Homebuyer Protection etc.

As it suggests, Life Cover will pay in the event of your death. Most polices will pay the benefits once the death certificate has been received but some will pay benefits upfront if a terminal illness is diagnosed. In order to qualify, it must be diagnosed that you are most likely going to die within six months and such a benefit could make your last months more comfortable.

The amount of life cover you require depends on your where you are in your life cycle. A young single person does not have the same demand as that of a married couple with an expanding family. If it is the latter, a good question to ask yourself is “how long would my family survive on my savings if I died tomorrow?” You may be fortunate and not be phased by such a question but 99% of the people we advise are insufficiently covered. What is more surprising that to get you and your family properly protected could be cheaper than you realise so contact us for a quote.

That said, most of us have some form of Life Cover it is generally not enough. It is worth reviewing since you may have started policies at home that are not valid while working overseas. Again, the life cover is linked to the property, which once again, does not leave much to the family to live on once the mortgage has been paid.

The biggest draw-back with Life Cover is that you have to die to collect. But what if you do not die but are diagnosed with some dread disease or severe ailment. You inability to work through sickness will not make the bills go away and you family still needs caring for. Critical Illness
Critical Illness protects us from the illnesses that do not always kill us nowadays due to the advances in medical technology but nonetheless have a massive impact on our lives. Examples are …

Cancer, Heart Attack, Stroke, Multiple Sclerosis, Kidney Failure, Heart Surgery, Major Organ transplant, Alzheimer’s disease, Paralysis, Blindness, Total Permanent Disability, Severe Burns, Coma, Deafness, Motor Neurone Disease etc.

You may survive one of the above but how would it impact on your ability to do your job now and earn. Moreover, how long would your employer pay you while you are absent from work on long periods of care and recuperation? Critical Illness is there to protect you whether it is to get the best treatment available, pay bills, ongoing care, gaining skills for a new career or all of the above. You are 4 times more likely to suffer a Critical Illness than actually die but this from of cover is so frequently overlooked. Once again, the cost is miniscule compared to the peace of mind and security you can offer your family – contact us and we shall provide you with a concise quote.

Similarly, there are three main categories on how Life Cover and Critical Illness can be structured i.e. Level Term, Whole of Life and Endowment. The explanation of these are as follows:

Level Term
You select a term for the cover you require at outset. The policy never has any value and ceases to provide any cover once the term has expired. This type of cover is popular since it is relatively cost effective. Term is good when specific period of cover is required, like a mortgage or other forms of loan but since it has no underlying value the premiums paid are an unmitigated loss from outset.

Whole of Life
This literally covers you until the day you die. The premiums are higher since you will make a claim one day. It can be structured so you do not have to pay the premiums until you die but over a selected period from outset. The policy does build up a residual value after a number of years and can grow to actually offset the premiums you have paid. Although more expensive, it is very popular since you know you are covered irrespective of how long you live and it has a residual value. Another attraction is that you are underwritten at a young age and the cover lasts until you die. If you had Term or Endowment based only and needed more cover at the end of your selected period, it could be prohibitively expensive whereas Whole of Life lasts literally what it says.

Endowment
This provides cover for a selected period from outset and has a nominal value throughout. Typically this is used in securing property with an interest only mortgage whereby the cover protects the loan and the value pays the outstanding loan at maturity. International Pensions can be structured similarly, whereby if your pension target $500k in 15 years, you can underwrite the pension for that amount in case you are not alive to fund it throughout. The pension is then passed on to the family after your death. The same example could be used for an Education fees or saving for a particular target

So back to how much you need is always a factor that many have difficulty grasping. Some people, I have to say, “something is better than nothing”! A quick rule of thumb is how much you would need in your bank account today to allow an income that would maintain your present lifestyle. Then decide on a budget you can afford to pay either monthly, quarterly or annually that you are willing to spend. There will be a vast difference on what your budget is and the cost of what you think you need. The human psyche still hates spending money on what will be the most important financial factor to your family after your death. It is important to sit with a Globaleye Consultant who can establish which type of insurance is most suitable for you and then do extensive quotations in order to secure the best terms (not cheapest) for you. A great idea but you have to contact us if you want more information and/or a quotation.

Income Protection
The most valuable asset while you are alive is your ability to earn. If you were to calculate how much money you are likely to earn until you retire you will find it is a considerable sum. That said you probably have not insured it – your toaster is probably insured though! Being unable to work for sustained periods because of numerous ailments will have a serious impact on your life. Expatriates do not have the support of the State to rely on assistance in such circumstances and very many fail to take steps to cover this aspect of financial planning.

Hospitalisation
This will pay you a fixed sum for every day that you spend in hospital as it suggests. It can be linked to your pension or savings if required.

Medical Cover
The cost of medical treatment continues to spiral and if you do not have cover you are gambling with your life. Expatriates must select a plan that meets their budget and will cover them in the event of illness. In the US, some hospitals will not treat you unless there is a valid cover in place. An expensive medical bill could have a serious impact in your financial planning. Go to the Medical Insurance section for more info.

Homebuyer Protection
If you have a mortgage you will need to ensure that you have the ability to pay this debt in the event of death, disability or loss of income. Most lenders will require some form of protection since they are not keen to repossess unpaid property.

It is advisable to use the biggest names in insurance – to all of which Globaleye have access. Local companies may provide some attractive rates but will they be there or ready to pay when an event happens. Always look for companies who are rated AA and have been around a long time so you have the peace of mind that your claim will be honoured without delay so those important benefits will be passed to those who need them most. Similarly, it may be financially prudent to consider placing your insurance in Trust in order to avoid probate and to ensure the benefits are passed quickly once again. Remember, even though you have died, the bills do not go with you and your family will rely on the money your cover will provide to survive. Do not leave it to chance and contact us today to sort out your protection needs.