One of our Finance New Zealand advisers has worked with their client for over 20 years. Recently, his client learned he has advanced cancer and has a short time to live. On top of this, they were impacted by the recent North Island weather events, which left them with damage to their farm. Our client’s life insurance policy had a clause for an early pay-out option for terminal illness, which our client was able to invoke. The early pay-out has given him “peace of mind”.

Our client has kindly offered to share his story so others can understand the importance of adequate life insurance cover and understand the benefits a terminal clause can have when you are a business owner.

Our client took out comprehensive life insurance to ensure that any business debts could be repaid and his family left in a good position should anything unexpected happen before retirement. He made sure there would be enough money to cover any unpaid business debt and enough money to ensure his wife can have financial security knowing she has options for the future. As well as providing finance assurance, the early pay-out has enabled him to take the pressure off and enjoy time with his family, including his many grandchildren.

Our client has been in business for many years. At the peak of his career, he employed 34 staff; today, he employs 5 staff. He likens the ongoing cost of premiums for adequate insurance cover to “keeping business machinery maintained or any other business expense”. “If we didn’t have the insurance cover we would have to fold the business”. Instead, I have had the time to transition the business over to my Son, who will continue to run the business and we can still keep staff employed. The knock-on effect from not having adequate insurance cover would have impacted many people”.

Our client’s advice to other business owners regarding life insurance is as follows: “Take out a life policy that has a terminal clause in it. The only good side of cancer is that you have time to work through things; it gives you a little bit of luxury. Because we have access to the money now, we can try a drug with the chemotherapy which costs $8,000 a pop. We wouldn’t have been able to do this without the money we have received today”.

For information about insurance, contact your local insurance adviser. Finance New Zealand does not provide insurance; however, if you don’t have a current adviser, then we can put you in touch with one. Contact your Finance New Zealand adviser to connect with an insurance adviser.