FINANCIAL INDEPENDENCE REQUIRES MORE THAN JUST A GOOD INCOME

One of the more sinister risks threatening the financial security of young families today is loss of income through illness or injury. Advantage One Risk Management Director, Andrew Venning, spoke out recently about what he describes as a potential financial situation facing parents with young children.

"It's all too common in today's society; people working tirelessly but leave themselves totally unprotected if they were to lose their ability to earn income. I think most people underestimate the value their income represents to their dependents over the long term. And, the younger people are, the more they stand to lose".

He stressed that the first step to addressing financial security is to be aware of the risks you and your family are exposed to, and perhaps the greatest risk is that of losing your ability to provide a secure and comfortable life. An extended illness or injury could deprive you of your ability to earn an income and your family of security. Unexpected death could also undermine the secure and comfortable life you want for your family.

The risk and associated financial costs need to be quatified. At Advantage One, we have a structured process for analysing debts and living expenses and calculating the ongoing income required to maintain lifestyle. Once we have identified potential shortfalls, we implement solutions via insurance policies which are cost effective and create a source of emergency capital and income that families can depend on.

Risk Management planning for young families generally involves four basic types of cover.

1. Income protection insurance to provide a replacement monthly income if you are temporarily sick or injured
2. Critical illness insurance to provide a lump sum of cash if you are diagnosed with one of many specified medical conditions, such as cancer, multiple sclerosis and heart attack.
3. Total and permanent disability insurance to provide a lump sum of cash if you become totally disabled and are unable to work ever again
4. Life insurance to provide a lump sum of cash upon death or terminal illness.

A combination of these insurances can provide the financial resources to maintain or adjust a lifestyle and ensure that people can independently care for their family with confidence and dignity.

Andrew Venning has been helping young families to address their financial security problems for over 25 years.

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