I was playing a round of golf last week (and I use the term golf very loosely) when something I saw prompted me to write this article. I was at the ninth tee and there was a bench where you could rest your weary bones and try to analyse where you were going wrong with your golf game. In my case, it was turning up to the course in the first place.
Anyway, on this particular bench was a plaque dedicated to a club member who had passed away. Turns out I knew the deceased. He worked in Finance and I was a client of his a few years ago. He had actually suffered a fatal heart attack on the golf course. He is survived by a wife and two young children.
Now, without trying to sound too flippant, I'm pretty sure he wished he had a crystal ball. Chances are he wouldn't have gone to golf that day. He would have got himself straight to the emergency ward where expert help would have been available for the impending heart attack he knew was imminent. Unfortunately, he didn't have a crystal ball. So he wasn't expecting a heart attack that day. And why would he. After all, he was only 36 years old.
I am now convinced however, that a lot of my clients and other people that I speak to must have one. Whenever I speak to them about Life or Disability Insurance they generally agree with me that they are underinsured.
"You understand that if you pass away, your insurance payment will need to be large enough to pay off the mortgage and provide your surviving family with income to make up for the fact that you are no longer around" I say to them wisely.
"Of course" they reply, nodding in agreement. "We are definitely going to look in to this at our next annual review." Or, "After we get back from holidays." Or even, "It's something I'll worry about when I get older".
I hear similar ridiculous comments when I'm discussing income protection insurance. "Income protection insurance, what's that" they ponder.
"It replaces your income if you can't work for an extended time due to sickness or injury." I reply sagely.
"I don't need that", they waffle. "I've never had a sick day in my life!"
Neither had my old mate who is affectionately known as Groggy. I have never seen him sick in the thirty years I have known him. Not even with a hangover. Which is quite remarkable when you consider he wasn't nicknamed Groggy by accident.
One day Groggy stepped awkwardly off the back of a Ute. He badly wrenched his knee and upon further investigation, it was decided that the injury was quite serious and he needed a complete knee reconstruction. He as going to be out of action for a while, but should be back at work within a few weeks if all went well.
Except it didn't. After surgery he suffered an infection which lead to blood poisoning. 18 months and a number of additional operations later, he was still off work. His wife had to go out and get a job while he stayed home to mind his young daughter.
If only Groggy had one of those crystal balls. He may have been more careful stepping down from that Ute. Or, at the very least, had some income protection insurance that would have provided him and his family with some income while he was recovering.
The truth is none of us know what awaits us in the future. If you have a mortgage, family, other debt obligations or all of the above, I implore you to contact your adviser and make sure you have adequate insurance coverage. You owe it to yourself and your family.
Don't wait until next year or next week or until you get back from holidays. Do it today. Unless of course, you have a crystal ball.