protection Archives | Oliver Asset Management

Apathy or action – can you really afford to ignore your business vulnerabilities?

May 24, 2013

closed There is no question that business protection considerations are a hot topic right now.

In the last few weeks there have been several discussions launched on Linkedin asking what small businesses are neglecting in terms of business protection and whether or not business owners are sticking their head in the sand when it comes to business protection.

There is a massive gap in the business protection market among UK business owners and some of the recent statistics from Legal & General in support of the Every Business Matters campaign on Unbiased.co.uk are quite staggering but not unsurprising.

There are just too many businesses out there who have insufficient or no cover in place to allow operations to continue on the death or serious illness of a shareholder, partner or key person.

I don’t think it’s fair to say business owners are sticking their head in the sand with regards to this issue, many are well aware of the seriousness of this level of risk and the financial havoc death or critical illness can bring on firm.

The issue is perhaps lack of guidance and education. Directors, Partners and Key People are busy doing what they do best on a day to day basis, growing their companies, developing their brand and making the venture a profitable as possible. Finding the time to discuss, consider and understand what their business protection needs are, is often a hard thing to do for no reason other than they are too busy doing other things.

Add to this, the general resistance amongst many advisers to sell business protection because they believe it is too complex or they don’t understand all the nuances of the cover and you have a great recipe for avoidance and apathy across the business sector.

I believe we have a responsibility to support business owners, to help them identify where their vulnerabilities lie and to explain the process to put the correct cover in place with the appropriate legal documentation.

It doesn’t have to be complicated or painful, taking the time to evaluate a business, identify key areas of risk and providing a solution is a tremendously rewarding exercise.

We have helped many businesses over the years to put the correct planning in place and time and again when the exercise is complete the owners reaffirm the process has given them a real peace of mind and sense of control. They feel able to move on with the day to day development of the business safe in the knowledge that all their hard work to create a business with value is underpinned with the correct protection.

If you have any concerns with respect to your business or you would simply like more information on business protection then we would love to hear from you.

Take action and don’t let apathy expose your business to unnecessary risk!

Dr C.

The (Transfer) Value of the Key Man

May 9, 2013

As the tributes rightly fly in for Sir Alex Ferguson, the most successful manager of our time, consider his value to the business over the last 26 years.

Hindsight is wonderful and exact and few would have been able to put a monetary value on Sir Alex especially at the inauspicious start to his Man U career.

In an age when football players are valued in 10s of millions, its intriguing to think of what transfer value might have been placed on Ferguson at the beginning of his last season?

A single player might surely make a difference, but if RVP never played again for Manchester United, chances are the new manager will replace him with somebody as good, better?

Imagine the effect on the share price (and longer term value) of Man U Plc if Sir Alex had carked it anytime during the last 26 years?

I’m sure, as a sensible employer, Manchester United would have had him extremely well insured from a Keyman point of view…or maybe they didn’t.

Time to look at your own Sir Alex and his or her value to you business and make sure that if its not a gentle exit to retirement and more of a catastrophe that makes them suddenly not there any more, you’re financial well prepared for the consequences.

Please speak to us about our Transfer Value Keyman cover solutions before the next 26 years pass.

Roland Oliver

Protection – can I really afford it?

April 19, 2013

Following on from my last blog I wanted to pick up on the cost of protecting yourself and your loved ones. It’s the age old objection to having the proper cover in place – “I can’t afford it, it’s more expensive than I thought it would be!”

The cost of cover depends on many factors, age, health, occupation, sum assured, term required, and yes it can be expensive depending on the requirement but we appreciate that budget has to be a factor in considering what can be put in place.

All too often people discount having cover in place as they feel the cost will be prohibitive and they don’t seek advice on what they could actually achieve within their budget. Then there are those that don’t feel there is any spare budget available to put towards protecting themselves and their family. I think if we all took a serious hard look at our weekly spends we might we might be surprised at what budget could be made available with a little careful planning.

In the average week we all like our little treats, a nice frothy coffee, a take-away, glass of wine or pint of beer, the odd magazine or newspaper, premade sandwich, or jumping in a taxi at the end of the night to make it home quicker.

Based on average current costs* if in a given week I had 3 coffees, bought a magazine, a couple of premade sandwiches , a takeaway, a couple of glasses of wine and a taxi ride home after my takeaway that could equate to weekly spend of £46.00 or £199.33 per month. It all adds up.

If we all took a serious look at the monthly spends on little luxuries we could make an immediate saving which could be put towards getting the right cover in place.

If I cut back a coffee a week and drop the take-away meals to once a month I make an immediate saving of £35 on average. What would £35 buy in terms of cover?

A single 28 year old male could have life cover of £120,000 for 30 years for as little as £30.44, a couple both aged 38 could have £220,138 of life cover for 20 years starting from £35.00 per month.

Still think it’s too expensive?

Get in touch with us today for your own personal calculation to see how your monthly luxuries add up and what cover you could buy with a little clever reallocation of your financial resources.

It only takes a few minutes to give you peace of mind for the rest of your life, can you really afford not to do anything?

Dr Claire Armstrong

*Based on Bright Grey’s online Lifestyle Calculator as of April 2013.

Life cover, it’s about more than insurance

April 4, 2013

When it comes to protecting ourselves and our loved ones from the worst happening, whether it’s a critical illness or untimely death, we all know some sort of life cover or critical illness cover is required to ease the financial strain of these events.

Time and again couples and families are left feeling the financial and emotional pressure because the cover was never put in place. It was never the right time to look at it, they were always too busy, they didn’t think they could afford it, they didn’t see the need to buy insurance as it never gives anything back.

However, there is a shift in the industry now towards providing more than pure insurance as the customer wants to know what’s in it for them, what are the additional benefits and why should they have the cover in place.

Apart from providing peace of mind that your loved ones will be taken care off on your demise a handful of providers are now looking to enhance the benefits available to you while you live a healthy life and in fact they work hard to ensure you stay fit and healthy while saving money.

Pru Protect is a front runner with their Vitality and Vitality Plus schemes which allow their policy holders to follow a Vitality cover healthier living programme which not only could add years to your life but reduce the need to claim for a critical illness. Their Vitality programme doesn’t just help clients stay healthy but rewards them for their efforts too by means of reducing the premium paid for the cover as they accrue Vitality points.

They also offer discounts with their health partners for half price health screening, discounts on Champneys spa breaks and even member deals with Cineworld, Vue, Legoland and Thorpe Park to name a few.

Pru Protect recognise that just selling insurance isn’t going to cut it in today’s climate and that everyone wants to know their money is being well spent with immediate benefits in return.

Bright Grey are also in on the act, offering a free Helping Hand service with their cover which is aimed at helping policy owners and their families cope with the trauma of loss or serious illness. helping hand pack

They offer a support service at a time when it is most needed whether its assigning a RED ARC nurse to help you come to terms with your illness, guiding you through the questions you need to ask a consultant or offering bereavement counselling for the family left behind.

They can help with getting you back on your feet with alternative therapies if conventional medicine isn’t the answer and provide rehabilitative support to get you back to work.

Just this morning I had a call from our contact at Aviva to let us know they have now launched their own RED ARC nurse service with their life and critical illness cover and in addition to this they also offer a free 2^nd opinion on your medical diagnosis.

red arc assured There has never been a better time to review your protection or get something in place if you have been putting it off. It’s about more than just insurance these days and there are a range of additional enhancements and benefits at your finger tips so why not get in touch today to find out more.

If you’re still thinking it’s going to be too expensive then watch this space as I will be blogging again shortly to demonstrate the real cost of cover and how there is something for every budget.

Dr Claire Armstrong

EU Gender Directive

May 11, 2012

On 1 March 2011, the Court of Justice of the European Union (ECJ) published its ruling on the legality of Article 5(2) of the Gender Directive 2004. The ECJ has reached a decision that, with effect from 21 December 2012, the use of gender as a factor must not result in differences to individuals’ premiums and benefits for insurance and related financial services contracts.

Simply put the changes taking effect at the end of this year means that women are likely to have to pay more when taking out new life cover and critical illness cover. It could cost around 15%* more for your life cover if you wait to buy it after 21 December 2012 so why would you want to pay more when you can act now?

If you are even thinking twice about why you might need cover here’s a few questions to ask yourself:

• What financial support do you have in place if you had to stop working due to critical illness? What if you were unable to return to work?

• How would you cope if a partner or someone you depend on financially were to die suddenly or get a critical illness? How would they cope financially if anything happened to you?

• Could your family continue in the lifestyle they’re accustomed to without you and your income?

If you’re a stay at home mum, don’t underestimate your value either, recent statistics from Bright Grey show that the cost of paying someone to carry out the many tasks us mums do could be more than £30,000 per annum.

Consider then how your family would copy financially if you were to die or become too ill to keep things running, how much would be required for childcare if your partner had to manage on their own?

Having the right protection in place can provide peace of mind when it’s needed most and if we girls are going to have to pay more in future then there is no better time like the present to get the cover in place.

Here’s an example of the potential impact of a rise in premiums to come:

Female aged 39 – £90,000 of Decreasing Life and Critical Illness Cover over a period of 21 years **

No one likes having to pay for insurance so why pay more than necessary – act now and get in touch to find out how we can help you get the right cover at the right price.

Even if you already have cover now is the time to review it and ensure if you need to increase your sum assured or add more to your plan you can do it without paying more than required.

More next week on the changing face of life and critical illness cover and some new options we are now looking at.

Dr Claire Armstrong

*HM Treasury Consultation Document, December 2011

**Premiums are correct as of 29/03/12, supplied by Legal & General and are for illustrative purposes only. 15% increase has been assumed based on current pricing in relation to the changes to the EU Gender Directive with effect from 21/12/12. Your actual premium will depend on your individual circumstance and could be higher or lower than 15%

Two Free Days

January 12, 2012

I listened to John Humphreys on Radio 4 yesterday quiz a medical expert on the recent pronouncement from MP’s on the idea of having two free days a week from alcohol.

It was clear that Mr Humphreys was desperately trying to justify his non-non-drinking days and it was great radio as the expert refused to sanction his habit without either party being specific!

Anyway, who is right and who is wrong is a matter of balance I guess.

What is evident is that as a nation we could really improve our diet, habits and exercise patterns significantly to deliver better overall health.

I’ve just come back from my local public gym and it was a classic early January visit – a smattering of recognisable regulars who were back doing their thing and about a 70% increase in January resolutionists a puffin’ and a pantin’.

I’m not going to talk them down as any attempt to change habits and improve health is good in my book.

I will say this: shiny silver trainers have no place in the gym.

Also what is it with the comfort blanket that is the sports-cap bottle?

It’s a fascinating item – it would appear to have magical powers that can render you invisible if you drink from it as you enter the gym.

I could go on and say that at least one of the treadmills was trying to understand why a bunch of local citizens had decided to go for a group run on one machine…

So what’s my point?

We’ve had a couple of underwriting decisions surprisingly go against clients and we are taking a much more in depth approach to understanding health and fitness issues as we create appropriate life, critical illness and income protection packages.

I’m encouraged by the likes of PruHealth’s Vitality program and the idea of discounts for improved health and lifestyle.

We still find clients reluctant to take out the full levels of cover that they really need. With our total protection review, we discuss all aspects of their health and fitness to allow us to get the right cover, at the right levels with the right focus on long term health.

Whether its two days off the laughing juice or a total commitment to an improved lifestyle, having the right levels of protection is vital.

Speak to us about all your protection needs, and we can even help you get fit!

Death and Taxes

October 27, 2011

Business Protection Revisited

For all business owners when it comes to protecting the business the key considerations are continuity and succession.

On the temporary absence or loss of a key person business owners need to consider for how long (if at all) the business could continue to run efficiently and remain profitable. In addition to this they need to consider what plans are in place to ensure business assets are valued correctly and passed to the right people.

Businesses look to protect themselves against every eventuality, buying cover for their buildings, contents, materials and cars. However, the majority don’t cover their single biggest asset – their employees. According to research carried out by the British Chambers of Commerce in 2009, more than 60% of businesses have at least two key individuals. However, 44% of those surveyed said their businesses wouldn’t survive longer than 12 months if they lost one of these key people.

We touched on this subject in our blog last month and it is a subject we plan to revisit regularly as there continues to be a staggering need for companies to address this issue.

We’ve all heard at one time or other someone quote those famous worlds from Benjamin Franklin “In this world nothing can be said to be certain, except death and taxes”. Ask any business owner what concerns them when it comes to tax and they will most certainly respond that they want to ensure they maximise all available tax advantages and to have the correct accounting procedures in place to do so.

Why then do so many companies remain resistant when it comes to having the correct plans and procedures in place to ensure death or serious illness does not affect the daily running of the business?

Consider the likelihood of at least one partner/director in a firm dying before age 65*

Age	Number of Partners/Directors
	1	2	3	4	5	10
35	7%	13%	19%	25%	30%	51%
40	7%	13%	18%	24%	29%	49%
45	6%	12%	17%	23%	27%	47%
50	6%	11%	16%	21%	25%	44%

Further to that consider the likelihood of at least one partner/director in a firm having a critical illness before age 65**

Age	Number of Partners/Directors
	1	2	3	4	5	10
35	29%	50%	65%	75%	82%	97%
40	29%	49%	64%	74%	81%	97%
45	27%	47%	62%	72%	80%	96%
50	25%	44%	58%	68%	76%	94%

Are the percentages as you expected?

Whether you are a Limited Company, Sole Trader, Partnership or Limited Liability Partnership the threat of death or serious illness of a key person is very real and it doesn’t have to mean the end of a business you have worked hard to create and make profitable.

If you are considering (or know someone who should be considering) continuity or succession planning we can help with calculating the level of cover required, how to set up the arrangement and the tax implications associated with the premiums and benefits payable on these plans.

We have dedicated teams with 5 of the top Business Protection Providers who can help us help you put the right plans in place, allowing you to get on with making your business profitable without the worry of what happens if someone takes seriously ill or dies.

It isn’t as complex or as expensive as you might think, so don’t delay, get in touch with us today and let the Expert Team at Oliver Asset Management ensure your business goes from strength to strength safe in the knowledge your protection needs have been met and will be reviewed regularly.

We look forward to hearing from you.

Dr Claire Armstrong

Source: www.actuaries.org.uk/knowledge/cmi/cmi_tables

*Based on mortality data from TMN00 (temporary assured lives, male non-smokers, 1999-2002) at five or more years’ duration.

**CIBT02. Based on 1971-2003 population data and experience, published in SIAS paper Exploring The Critical Path, 2006. Males, stand-alone extended cover, including own occupation and total and permanent disability.