Why it is best to plan for the worst

ANYONE meeting with a decent financial adviser might come away with the impression that we are an unusually gloomy breed, writes Stephen Womack, consultant at David Williams IFA. We appear to dwell excessively on the possibility of clients being ‘run over by a bus’ or stricken by a dread disease.

But there is a vital reason to concentrate on the bad things in life. Protecting against the impact of accident or illness is the foundation of good financial planning.

If an earned income stops suddenly – and there is no protection in place –  then the other plans you make for yourself, your business and your family can easily crumble.

For business owners and senior managers, the risks are doubled.  As well as looking after the family, there is often also a need to ensure the business can continue smoothly. This may mean providing resources for a business to hire in temporary executives while a senior person recovers from an illness.

It could also mean providing a substantial lump sum to allow partners or directors to buy out the share of someone who cannot return to work, or to purchase this from their family if there has been a bereavement.

David Williams IFA Chartered Financial Planners has huge experience in helping businesses and their senior figures safeguard against the worst.

Personal protection can include plans that provide a short or long term income after an illness, or a lump sum should you be stricken with a serious or terminal condition. This cover can be structured so that your firm pays the premiums.

And the safety net can be extended to the whole workforce via group death in service and group critical illness schemes. By widening the net to all, it is often possible for older workers and those with health issues to still benefit from some protection.

Business protection covers can include key person insurance, where a company pays to insure itself against the cost of replacing essential staff. It is also wise to insure long term business loans, especially where these are backed by personal guarantees.

Meanwhile, shareholder and partnership insurance provides vital funds should business owners need to buy out a co-director or partner, or that person’s beneficiaries. These plans normally run alongside appropriate trusts and option agreements that give both sides security in any transaction.

To discuss any of these options contact Stephen Womack at David Williams IFA on 01604 621302 or email to info@dwifa.co.uk