The Importance of Financial Planning

Serious Illness Cover – Protecting Your Family Income

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How often does it happen that you bump into an old friend in the shopping centre or at a social gathering when, not long into the conversation, you learn of their suffering or that of someone close to them? Primarily your concerns are for their well being and that they make a full recovery, but what we often overlook are the associated financial costs which may impact heavily on a family or an individual. These could include loss of earnings, treatment or care and/or medical equipment which could aid recovery. What’s more, your financial situation should be the least of your worries if you were to become seriously ill.

We often overlook are the associated financial costs of a serious illness which may impact heavily on a family income, including loss of earnings, cost of treatment or care and/or medical equipment

Another consideration is that people are now living longer than ever and as a consequence the chances of being diagnosed with a serious illness are higher. Below lists out some more common serious illnesses and the average number of people affected in Ireland each year:

Cancer – 20,000 new cases each year*
Stroke – 10,000 per year**
MS – 250 new cases diagnosed each year***

One way to potentially alleviate such costs or worries would be to put a Serious Illness Cover policy in place. Serious Illness Cover, also referred to as Critical Illness Cover or Specified Illness Cover is designed to provide financial support in the event that a person suffers from / is diagnosed with an illness which is specified in the policy conditions. The plan pays a cash lump sum which can be used to offset costs during recuperation.

In recent years, Life Assurance companies have enhanced their offerings in the area of Serious Illness plans. We are now seeing the addition of illnesses to their specified lists and indeed the addition of partial payouts for more minor conditions / accidents. Although hard to think about, most plans also include some level of cover for children at no additional cost.

What is covered?

Most insurers now cover in the region of 40-50 illnesses but a key point for consideration is that the range of conditions varies between one insurance company and another. The statistics show claims to be greatest for malignant cancer, heart related diseases and stroke. On a more positive note, however, survival rates have improved significantly with advancements in science and research.

If you have ever asked yourself the question; “How financially secure would my family be if I became seriously ill?” and if the answer is “not very” then consider Serious Illness Cover.

Of course, it is extremely important to seek professional advice in this area and with that in mind please contact us to arrange a discussion.

Who should be covered?

Ideally the main breadwinner of the family should be covered, especially if that person is self employed and if an inability to earn an income would impact on their family finances.

*Source: National Cancer Registry, Ireland ** Irish Heart Foundation *** MS Ireland

If you would like to seek impartial and unbiased advice on Serious Illness Cover then please contact Aidan Wall at 046 924 0961 or email aidan@lifetimefinancial.ie

We can help you to gauge what level of cover you might need or whether you even need any cover at all. We can also research the market to find you the appropriate product in terms of price, terms and level of cover.

 

The Importance of Financial Planning

Set Your Financial Goals With a Lifetime Financial Plan

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A recently published survey revealed that a significant amount of our population is suffering from high levels of stress due to concerns about their financial well being.

Pension planning, for example, was a serious source of stress with over 51% of respondents saying they were not saving enough for their retirement. Not knowing how to plan for your financial future can lead to inaction and high levels of stress.

Identify Your Financial Goals

Despite being worried about their financial future the vast majority of people do not have a Lifetime Financial Plan to address this. In order to put together a good plan you need to ask yourself some straight questions…. 

  • When do you want to retire?

  • If I die or suffer serious ill-health how is my family fixed?

  • When do you want your mortgage paid off?

  • Have I made a will?

  • Should I review my savings and investments?

  • Can I save money on the cost of some utilities and services – Energy, Car or Home Insurance, Health Insurance etc.?

Let’s have a brief look at some key areas:

Take Control of your Pension

Starting a Pension Plan or increasing your contributions to an existing one is a very good move to make at the start of 2016.

  • The younger you start your plan the better as your pension pot will then be bigger.

  • If you have a workplace pension scheme you should join it as your employer is likely to be making a contribution for you.

  • Those approaching retirement should make sure they are not taking too much investment risk.

  • Identify your retirement goals and the cost of getting there.

  • Put in place a plan to review your Lifetime Pension Plan at least once a year.

Protect your Family

Death is a taboo subject to most and yet having plans in place to deal with the financial impact of unexpected death is vital for anybody with dependent relatives. Equally you need to consider you and your families circumstances if you suffer a serious illness to the point where it has the effect of eliminating your income. 

  • Do you have Family Protection/Life Insurance cover?

  • If so will it be enough to maintain your family’s standard of living?

  • Should you have Serious Illness or Income Protection cover or both?

Estate Planning

Estate planning is a vital component of any robust financial plan. While, for example, the recent budget increased the tax free threshold for inheritances passing between parent and child to €280,000, with increasing house values etc., it doesn’t take a lot before there are very heavy tax exposures. Only a third of Irish people have made a will which is crazy if you want to dictate and sensibly arrange how your affairs are going to be managed when you die. You certainly don’t want to leave yourself dependent on the laws of intestacy which may not distribute your assets as you would like.

  • Have you made a will?

  • Does it need to be reviewed?

  • Are there any financial or tax planning matters that need consideration?

The Need for Regular Reviews

You should review your financial plan with your Broker on an annual basis. Numerous studies have shown that those who conduct regular reviews having higher savings and pension values than those who do not. 

  • A good plan will help eliminate the stress of not knowing where you are going.

  • Your circumstances do change regularly, for example, additions to the family.

  • Other situations change – tax laws, interest rates, economic climate etc, and your Financial Broker will be able to keep you up-to-date with these changes.

     

 

If you would like to take control of your finances in 2016 and get your Lifetime Financial Plan in place then please contact Aidan Wall, QFA, at 046 924 0961 or email aidan@lifetimefinancial.ie

 

The Importance of Financial Planning

Financial Broker Vs Bank Advisor Part 3: Competitive vs Monopolistic

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In Part 1 of this series of articles I explained that an advisor at your bank is often tied to a limited number of financial product providers, greatly restricting the amount of choice it can provide to you the customer. Impartial Financial Brokers are not tied in the same way, and are therefore free to research the market for a more competitive alternative which is often better suited to your specific requirements.

The Competition Authority in Ireland has noted that this ability to act in the best interest of our clients results in Life and Pensions companies providing more competitive quotes, more flexible terms and better product design when engaging with an Impartial Financial Broker.

This leads to the ultimate question, why would you want to pay for what is often an ill-fitting off-the-shelf product from your bank when you can arrange a better suited product that often costs less through your Impartial Financial Broker?

If you have already availed of a free financial planning service or purchased a financial product which you wish to review, I would be happy to do it for you. Call me at 046 924 0961 or email: aidan@lifetimefinancial.ie Website: www.lifetimefinancial.ie

Aidan Wall Financial Services Ltd T/A Lifetime Financial Planning is regulated by the Central Bank of Ireland.

The Importance of Financial Planning

Financial Broker Vs Bank Advisor Part 1: Tailoring vs Forcefitting

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If you have been offered a financial planning service or “wealth check-up” by your bank, you may be unaware that banks tend to ally themselves with a single provider or a very limited number of financial product providers, greatly restricting their ability to provide you with more choice.

This often results in your requirements being force fitted into an off-the-shelf financial product which is unsuitable to your needs, uncompetitive in terms of pricing and unrepresentative of the actual range of choices available to you. A service which initially appears to be “free” could therefore end up costing you more in the long run.

Impartial Financial Brokers, on the other hand, are not restricted to a limited number of product providers, and are therefore free to research a much larger number of providers to find the most appropriate solution for you with regard to price, suitability and terms.

This is known as a “fair analysis” of the market, as it gives you a much broader picture of the range of choices available to you, and when it comes to your personal finances it’s always better to have more choices.

If you have already availed of a free financial planning service or purchased a financial product which you wish to review, I would be happy to do it for you. Call me at 046 924 0961 or email: aidan@lifetimefinancial.ie

Website: www.lifetimefinancial.ie

Aidan Wall Financial Services Ltd T/A Lifetime Financial Planning is regulated by the Central Bank of Ireland.

The Importance of Financial Planning

Protecting Your Family Business Interests

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As a business owner you protect your property, your vehicles and equipment. And so you should because if your business suffers a catastrophic event involving these, the very financial viability of your business may be in jeopardy. But have you considered what would happen to your business if you died prematurely or if you were so incapacitated, through illness or injury, that you could not run your business anymore. Equally, if you have fellow shareholders or partners or you have a key member of your business team, who are vital to the viability of the business, think about the consequences if the same happened to one of them.

Key Issues:

You may need to consider the impact on your business and/or your family should any of the circumstances mentioned above unfortunately come to pass.

  • Would your family stay in the business or would they be required to sell the business?
  • Would the remaining shareholders/partners, such as Canada online casino Maple Leaf, in the business have the funds needed to buy your share from your family?
  • Would you have the funds available to buy your co-owner’s share of the business from their family?
  • What would be the impact on your business in the event of the death/impairment of a key employee or business partner?
  • What about the tax implications?

It won’t happen to my/our business

Many business owners believe that it simply won’t happen to them. The chances of one partner / director, in a two or three man business dying or becoming seriously ill before retirement, are probably a lot higher than you might think and it does happen. Quite often what is left is a very serious financial problem mainly through the lack of readily available capital to deal with the consequences.

There is a Solution

Business protection can assist in ensuring the continued survival of a business and provide for a deceased business owner’s family in the event of premature death or serious illness and incapacity.

Shareholder/Partnership Insurance (Business Owner’s Insurance)

This provides funds, through the proceeds of an Insurance Policy, to the surviving business owners to purchase the share of a deceased’s shareholding from their personal representatives. Depending on the structure of the business the cover can be set up on a personal or corporate basis. This cover ensures the deceased’s legal representatives / next of kin are provided for and the surviving business owners retain control of the business. The cover in question should be carefully co-related to a properly structured shareholders agreement that addresses the wishes of shareholders/co-owners in the event of such an occurrence.

Keyperson Insurance

This type of cover is designed to protect the human assets of the business in the same way as fire insurance protects a company’s physical assets. Protection, again through an appropriate Insurance Policy, is taken out by a Company on the life of a key employee to protect the Company as a result of the death or serious illness of the key employee.

Gift or Inheritance Tax Planning

As a business owner, it is important also to take a close look at the implications of Capital Acquisitions Tax if you are planning to pass on your business to your family when you die. Inheritance tax can become a real burden where financial resources are tied up in a business. If you do not plan ahead, your family could be faced with a difficult decision between having to sell the business or having to borrow the money to pay the tax liability. There are a number of solutions to this and Gift or Inheritance tax planning allows you to plan for the tax liabilities which could arise, thus ensuring that the business won’t have to be sold off to pay the tax bill.

The Next Step

Each of the situations outlined in this article requires very careful consideration and planning. The very first action should be to seek good and expert advice. Why not give us a call and together we can set the proper planning in train.

Call Aidan Wall today at 046 924 0961 or email: aidan@lifetimefinancial.ie for expert impartial advice on Business Protection.

The Importance of Financial Planning

Life Assurance – Looking After Your Loved Ones

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Statistics show that people are more likely to insure their cars and homes than themselves. They don’t seem to baulk at all about insuring their borrowings such as the mortgage on their home, however, insuring themselves has been shown to be much more price sensitive. Perhaps it is the mandatory nature of car, home and mortgage protection cover that makes it so much more acceptable. In reality, however, your life is your most important asset – especially if you have dependants.If you have people dependant on your income generating ability such as a spouse and children you really ought to be taking measures to ensure that their financial wellbeing is secured in the event of your untimely death.

Stop, Think and Ask Yourself…

  • Do I have dependants who rely on me and my income and who would be at a major financial disadvantage if the worst were to happen to me?
    • If the answer is yes and there is none or not enough Life Assurance cover in place then you should consider doing something about it.
  • Questions that need to be asked and advice that needs to be sought around this are: –
    • How much cover should I have?
    • Apart from providing for my dependants future financial wellbeing, do I have liabilities that need to be covered?
    • What type of cover do I need and for what period of time?
    • What is the cost and how do I go about getting best value?
    • Do I need to cover my spouse’s life also?

So…what are the next steps?

There are many reasons why people are slow and reluctant to put in place appropriate and sufficient Life Assurance cover.

  • It’s discretionary and therefore not prioritised – it should be though
  • There is a fear that it is hugely expensive – in general this is not the case
  • Maybe you feel that having Mortgage Protection to pay off your mortgage is enough – it’s not
  • How do I start?? – it’s easy, seek good advice

The role of a good advisor in all of this is to help you through the process of:

  • Identifying what type of cover you need
  • How much cover you need and the cost
  • Helping you choose the most appropriate policy for your needs
  • Assisting you through the process of putting the policy in force
  • Carrying out regular reviews to take account of your changing circumstances

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