The saying that there is more than one way to skin a cat is so true
when it comes to financial protection. Many of us have Life
Insurance. The issues around this though is the way it is set up and
owned, does it have a specific purpose and is it calculated correctly.
What is Life Insurance used for:
Family Protection - In New Zealand it is estimated it costs $10,000
per annum per child to raise each child. If the major income earner
dies, how does this affect the income normally being generated in to
that family unit. Providing to ensure the family has enough income to
maintain their standard of living is essential to the health and
well-being of the family unit. Life Insurance can be a lump sum
payment or drip fed to families.
Debt Protection - Major debt like House Mortgage is generally well
covered from an insurance point of view. Protecting people's biggest
asset and providing a roof over loved ones heads is a vital
consideration. Other debts such as business debts, personal loans, and
other capital payments owned to individuals can be missed out though in
the calculation and should be considered essential as well. Separating
thes purposes out is also vital especially when calculating how these
premiums are to be paid, who pays and should they become a tax
Trust Ownershp - Do you have a trust? Who should own your life
insurance policies then. Should they be cross owned, owned
individually or owned by the trustee's of the trust.
Shareholder Agreements - Are you a Shareholder of a business. What
happens to those shares if one partner dies? The use of Life insurance
can be much more beneficial than the alternatives of having to raise
capital to buy those shares off of someones estate or go in to business
with the partners family. This gets very messy. Having an agreed
level of cover in place to purchase the shares and buy the family out
is a fantastic strategy.
Key Person Cover - Providing a cash lump sum in to a business on the
death of a Key Person will ensure that the business has the cash-flow
to continue trading. You may need to hire a replacement or have a
financial controller step in to take the business over.
Life Cover provides a lump sum payment to your dependants, or other
nominated beneficiaries, in the event of your death. Whether it is
buying a new house, paying off the mortgage or bank loans, education or
retraining, your loved ones will have more choices to help them get on
For more information please contact...
New Vision Financial Services Limited