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Scroll down for an insightful article from CWIB about how small business owners should be protecting themselves financially.
Worth a read!
With business and personal debts to their name, small business owners have a lot of reasons to protect themselves financially. So why do so many ignore the risks?
When you’re a small business owner, you pour your heart and soul into your business. And why wouldn’t you – it’s yours! But what many small business owners fail to think about is the vulnerability of their financial situation.
Having so much at stake, both emotionally and financially, might be great for motivation. But it’s not so great if something happens to you and you can’t work.
You’ve worked so hard to give yourself a good income and it plays a big role in your lifestyle and that of your family. While many Australians take out health insurance to protect against immediate needs such as hospital stays, they don’t consider the longer-term needs covered by life insurance. Long-term debilitation could have a major impact on your financial security. But sadly, 30% of Australians say they would wait for something to happen before they purchased life insurance1.
It’s interesting to note the generational differences when it comes to insurance needs. Gen X is more likely to have life insurance cover greater than $1 million. This can be linked to the fact they are entering their 40s, which is typically a higher-risk age due to dependent children and greater debt levels.
16% of Baby Boomers didn’t know what amount of cover they had – indicating they are less concerned with insurance. Like Gen Y, they are less likely to have big financial responsibilities because Baby Boomers have paid off their mortgages and their children have left home1.
Those aged 40+ with dependents and a higher mortgage typically have more reasons to be insured. This is evidenced by the fact that people in this age group tend to have more insurance cover than others, with 92% having home and contents and 70% with life insurance. These percentages are much higher than the rest of the population1.
Insurance is extremely important to the group because they have higher financial risks. As a result, they are more knowledgeable about life insurance and are more active in taking up cover outside of super. They also experience more emotional reward for being insured – with 46% saying life cover gives them peace of mind in knowing their family will be looked after. This contrasts with other population groups who have less knowledge and are more likely to feel indifferent to life cover1.
Life insurance isn’t just about protecting your family financially if you die. It’s about protecting your lifestyle is you get sick or injured. So, if you can’t work for a while – or ever again – you have a financial back-up plan.
There will always be strong reasons to include life insurance as a critical part of your plan for life.
To find out more about life insurance options, call us on 08 6279 2300.