Cycling, skiing, surfing, bush walking, evening enjoying a night on the turps can be a high risk activity in this day and age. Any of which could set you back weeks or months in business if you were to injure yourself. But how many of us are really insured correctly?
In the weeks after the Easter break, last Christmas’ holidays are a distant memory for most. But not for those who suffered an injury or illness whilst they were away.
My recent holiday to Japan saw 4 broken wrists in the travelling group around us, just on a two-week holiday in the snow. If this were to happen to you would your insurance have covered you for the loss of income and the aftermath of having to serve your clients without use of your hand? It is one thing to take travel insurance to protect you from the ills when occur and its worth noting that some travel insurance doesn’t cover you for high risk activities. But what people don’t consider often enough is the potential loss of income after an injury that travel insurance does not cover.
Many business owners and medical professionals tell horror stories of being laid up with a broken leg after a ski trip, unable to work for weeks or months despite their company requiring them to, and their family being dependent on the income. More stress can placed on an individual than the injury alone through this. But there is a way around it for business owners who want to think ahead, and have the peace of mind to continue their recreational activities.
For the everyday employee, Income Protection insurance is generally included in their employer super fund. However those who are self employed generally are to seek their own personalized cover, tailored to their income, risks and business scale. Most have a thirty-day waiting period after an injury or incident to enable a claim, but policies can be tailored to kick on day one after an injury or incident.
Three things you need to think about when considering your income protection as a business owner:
- How long can your family delay the next pay packet coming in. If you have considerable saving accessible to you the 30-day delay periods may seem quite sensible.
- What are the outgoings of your business that that require insurance for your presence? If you are required to be a work for the payment of administrative or management wages, you might want to consider including this in your amount as a business expense.
- How much will you need to service both personal and business debt and other liabilities? It is essential to ensure that your benefit is tailored to meet these overheads so when you are well again your business involvement can pick up where it left off.
It is pleasing to note that incomes protection of personal and business income is still fully tax deductible, making it a sensible investment for a high earner with a risky lifestyle. Thinking about these things will make your next holiday a lot more easy to enjoy.
This article was written by Graham Campbell, Principal and Senior Financial Advisor