May 2017 3 Minutes
Income Protection and Life Insurance – The REAL story
Below is a case study from Albert Nellini at Vision Financial Strategies. Michael’s story gives a real-life insight into the importance that Income Protection and Life Insurance can play in your family’s financial security.
Michael was the CEO of a large labour hire company. He was married with three children, all in their late teens attending school and university. The family lived in a beautiful home which they loved and where they did a lot of entertaining.
Life was good. Michael was planning to buy into the business where he worked. He enjoyed football, playing guitar and loved a glass of red wine.
About two years ago Michael went to the dentist for a routine check-up and clean. The dentist noticed a black spot on his gums and suggested it should be checked out.
A biopsy was done, and the verdict, multiple myeloma, a cancer that had invaded about 35% of his body.
Michael had had no symptoms, he felt wonderful and only a visit his dentist discovered the he was in fact very ill.
Treatment commenced which consisted of stem cell replacement and chemotherapy. This went on for some months following which it was pronounced that Michael was in remission. He had beaten the cancer.
Fast forward three months.
Michael started feeling ill and returned to his doctor. The cancer was back and seemed to be more aggressive this time.
Michael became ill to extent he was now unable to work. He was spending more and more time in hospital.
The good thing was (if there can be a good thing in these situations) that Michael had income protection insurance. This monthly insurance payment guaranteed that the family expenses, could continue to be met even though Michael was not working.
Michael was particularly worried about keeping the family home.
The income protection insurance payments ensured that loan repayments could me maintained and the home could be retained.
Unfortunately, things did not get better. The doctors advised Michael that the prognosis was that he had less than 12 months to live.
Michael also had life insurance. His life insurance policy, like many, has a terminal illness clause whereby, if the insured has less than 12 months to live then the insured amount is paid out immediately. This was the case with Michael who received some $1.4 million dollars of insurance proceeds.
He immediately paid off his housing loan ensuring that that family would never have to worry about having a roof over their heads. The remaining funds will be invested to provide his wife with an on-going income stream.
In the beginning Michael did not want insurance and, like most of us, hated paying his monthly premiums. Only when this awful situation arose that he was thankful that the insurance was there to protect his family.
Michael lost his battle with cancer in March. He was 50 years old.
Albert Nellini | Vision Financial Strategies
4 Charles Street, South Perth WA 6151