When the cover wasn’t quite enough

Sometimes we have all the right intentions but don’t quite get the right solution.

The story

Michael is a dental technician.  He rents rooms in a city office tower and builds bridges, crowns and dentures for a number of local dental practices.  He employs Louise as an administrator to manage the front desk, collections, deliveries and office management.  Michael is married with two small children.

His business is thriving but after an assessment with an adviser he learned how vulnerable his family would be if he could not work. He arranged to take out income protection insurance. This cover would pay 75% of his normal income whilst he was unable to work. It would ensure he could feed his family, pay the mortgage and other bills and maintain a close-to-normal lifestyle as he recovered.

Months later, Michael had a waterskiing accident and received a neck injury that left him hospitalised. He undertook intensive rehabilitation over four months and used up his cash reserves. After the 90-day waiting period, the policy started to make payments and everything seemed under control.

When the rent account for his practice rooms arrived and Louise asked about her pay, he realised he would have to use his personal resources to keep the business open until he could return to work. The income protection cover he had wasn’t enough for his business, too.

The solution

Michael could have covered this risk by also purchasing a business expenses protection policy.  This would have paid the ongoing expenses incurred by the business — such as rent, electricity, phone and Louise’s salary for up to twelve months.

It pays to consult with a specialist who can analyse all your insurance needs — not just the obvious ones.

Want to know more?

To make sure you have cover that is right for you, in a tax and cost-effective structure, talk to a Lewis Financial Adviser. Get the cover you need.