Managing Uncertainty

Risk Management (Personal Insurance)

The discussion of risk management is in the context of personal risk mitigation or protection of your income and assets via insurance. Also known commonly as personal insurances.

RiskThere are four main areas of personal risk management (insurance).

Life / Death: If you are no longer present or have passed away.

Total & Permanent Disablement (TPD): If you become totally and permanently disabled to an extent that you are not able to physically work in your ‘Own’ occupation or in ‘Any’ occupation that you are reasonably suited to by education, training and experience.

Trauma or Critical Illness: Also known as recovery insurance. Trauma cover provides you with a lump sum payment if you’re diagnosed with a specified medical condition or serious injury, or undergo a medical procedure outlined within the insurer’s policy. The common types of Trauma includes heart attack, major organ transplant, cancer or stroke.

Income Protection: Normally protects 75% of your gross income in the case of temporary disability or accident that renders you unable to work. You are expected to recover over time and resume work. There are options to add superannuation replacement or top up to some income protection policies.

The fifth type of risk protection relates to Key Person covering the permanent or temporary loss of a key person in a practice or business. The key person(s) in a business are critical to the functioning and operations or survival of the practice and normally is the main income or revenue provider for the business. The loss of a key person may deem the business to fail.

For most professionals, your ability to earn income (the product of your intellectual software coupled with experience, intuition, judgement and physical ability), is your most valuable asset. For medical specialists, after studying, training, subjecting through internships and accumulated experience, this can typically be a 12 to 15 year journey. What would happen to your life plans if you were not able to perform your specialist duties as a medical professional, consultant or surgeon any longer? For many, what will happen to your family and/or children?

A wealth plan is never complete unless you are able to put adequate personal risk protection mechanisms in place. This is evidently clear in our view.

Elixir Wealth Advisory specialise and consult in personal risk protection. Our depth of experience and knowledge allows you to not only have the correct risk management structures and ownerships in place, but to also recommend and calculate the most appropriate levels of cover for your needs. Premiums as well as quality, tax deductibility, features and benefits of each policy is considered prior to making any recommendations for you.

To cover your outstanding liabilities is a good starting place, however, you must go deeper than that and consider restitution (the consequences of financial loss over a lifetime) should you not be here or be able to physically perform your specialist duties for which you have studied and worked so hard to achieve. The emotional loss cannot be financially measured, however, financial compensation will help to alleviate some of the pain and provide a degree of comfort. Proper risk analysis is a starting point and real life examples for costs (premiums analysis) are displayed below. Insurance premium comparisonsLifeTPDIP

Before we make any recommendations, thorough research, dedication and analysis is applied with our insight and experience to make the most informed recommendations as it applies for you.

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