I was thinking of these statistics when recently reading an article in the Courier Mail1 about Gold Coast pro golfer Matthew Ecob who suffered several heart attacks in March this year.  At 38 years old, Ecob is a man in the prime of his life.  He has a thriving golf career, is happily married and is the father of a daughter, 7, and a son, 4. 

The story describes how Ecob, 38, fought for his life after suffering two cardiac arrests that prompted “code black” emergencies at Sydney’s Royal Prince Alfred Hospital.  He now has a pacemaker fitted.

Despite living a fit and active life and he and his family having no history of heart problems, he is now one of the more than 3.5 million Australians affected by cardiovascular disease2.  Heart disease affects two out of every three families.

Now this story has a happy ending because Ecob is back on feet on his feet, and eight weeks after his heart attacks has returned to competitive golf in Queensland. But he’s not out of the woods yet.  While he is back working he is not well enough to fully participate in his golfing career with overseas tournaments temporarily beyond his reach until his health improves.

The Heart Foundation says cardiovascular disease prevents 1.4 million people from living a full life because of disability caused by the disease.  If you suffered a heart attack and found yourself in a similar or worse position to Ecob, how would you and your family cope physically, emotionally and financially?

If you had trauma insurance, you’d should be okay.  Trauma insurance covers you for traumatic medical conditions such as heart attack and can help remove financial stress and pay for changes you may need to make to your lifestyle.  Insurance can help pay for your rehabilitation costs, lifestyle changes such as refitting your home, enable you to pay for a carer or for your partner to reduce working hours to care for you, help you pay off debts and if there is any leftover provide a reserve to use as income.

Trauma insurance can be taken out on its own, or as a combination with life and total and permanent disability insurance.  There’s a policy out there to suit every person on every budget, but one of the best way to ways to get a policy that suits you is to speak to a financial planner.  You can call us on 1300 766 323.

1Pramberg, Bernie, 20 September 2008,  ‘No rough patch will stop Matthew Ecob’s round’, Courier Mail, http://www.news.com.au/couriermail/story/0,23739,24371658-5014143,00.html

2 Australian Heart Foundation, http://www.heartfoundation.org.au/Heart_Information/Statistics.htm

 Please Note:

This publication has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision, you need to consider (with or without the assistance of an adviser) whether this information is appropriate to your needs, objectives and circumstances. This information is provided for persons in Australia only and is not provided for the use of any person who is in any other country.

a) cope with the unexpected; and

b) to minimise your own risks in life.

A lot of time has been devoted to retirement incomes and how we all need to save for our own retirements – but what if you don’t get there, or get sick or injured along the way – I know it probably won’t happen to you, but it will more than likely happen to the person sitting next to you.

Consider the following:

• In 2006 one of the country’s leading insurers paid out over $136m in claims.
• Of that 50% was for death claims with the youngest claimant being 19 years of age.
• The other 50% was paid out to those who will either never work again or were off work for an extended period of time.

Some sobering stats – the youngest Income protection claimant was 20.

The youngest Critical illness claimant was 27. More than 82% of these claims were for cancer, heart attack or stroke.

So I ask you, when you have your first heart attack, what are you going to lose, the house or the mortgage?

You see not only do we develop strategies to increase our wealth, but we also need to look at ways to protect it – after all take away your ability to earn an income and your plans will fall apart.

If you have not looked at your personal wealth protection portfolio over the last 3 years, now is the time to do it, – why I hear you ask – because no insurer will look at you once you have your heart attack.

This information has been prepared without taking into account your individual objectives, financial situation or needs. Before making a decision based on this information you should consider its appropriateness having regard to your objectives, financial situation and needs. You should read the applicable Product Disclosure Statement, available from your financial adviser, before making any decision about whether to acquire or invest in a product. Tax legislation or its interpretation may change in the future. You should seek tax advice specific to your circumstances before making a decision.

No doubt many of you are aware of life insurance, insurance for total and permanent disablement, and income protection. A relatively new concept that has been around since the early 1990’s is known as Trauma or Critical Illness insurance – this type of insurance basically pays out when you catch the disease that is going to kill you.

Think you are bullet proof – well consider the following facts that came out of the conference:

Every hour of every day in Australia:

31 babies are born;

15 people die; and

47 people are diagnosed with a critical illness.

Everyday in Australia, 32 women are diagnosed with breast cancer.

Approximately 53,000 Australians will have a stroke every year.

But you are fit and healthy I hear you say, this will happen to someone else. Well, a leading cardiologist at the conference pointed out that 60% of 30 – 39 year olds and 71% of 40 – 49 year olds have some degree of coronary disease. But I am sure that does not affect you, although coronary disease does generally start when you are in your early 30’s.

A quick question for you and your investment portfolio (or more precisely your family), when you have your first heart attack, what are you going to lose – your house or your mortgage?

This information has been prepared without taking into account your individual objectives, financial situation or needs. Before making a decision based on this information you should consider its appropriateness having regard to your objectives, financial situation and needs. You should read the applicable Product Disclosure Statement, available from your financial adviser, before making any decision about whether to acquire or invest in a product. Tax legislation or its interpretation may change in the future. You should seek tax advice specific to your circumstances before making a decision.

But what about your business – as a business owner you are probably evaluating your product lines, looking for new markets and generally looking at strategies to grow your business in troubling economic times.

But these sorts of times also can take a human toll on you the business owner. Higher levels of stress can lead to illness and business owners that have not taken the necessary steps to protect themselves and their businesses can quickly find themselves a victim of the global economic slowdown.

Consider the following*:

1. 1 in 3 men and 1 in 4 women will suffer from cancer before age 75

2. An Australian dies every 10 minutes from cardiovascular disease

3. A 40 year old male has 1 in 2 chances of having coronary heart disease in their life

4. Working Australians have a 1 in 3 chance of becoming disabled for more than 3 months before turning 65

5. In 2004 over 1,500 people were killed in motor vehicle accidents in Australia

6. Injury is the leading cause of death among people who are under 45 years of age

7. Nearly 1 in 10 men will develop prostate cancer during their lifetime

Each year around 10,000 Australian men are diagnosed with prostate cancer and 2500 die of it.

One of the strategies that may suit you and your business is a Business Succession Plan. The aim of a business succession plan is to ensure that the business survives even after the death or critical illness of one of its principals.

So what happens if a business owner suffers a tragic event and there is no plan in place?

· Third parties could end up with an unacceptable degree of control in the business;

· A deceased owner’s estate could demand a payout forcing the business to be wound up;

· It could be necessary to negotiate additional borrowings or face asset depletion;

· The stability of the business could be questioned by suppliers and customers;

· Lending institutions could seek repayment or re-negotiation of loan facilities.

Consider this scenario:

The widow looks at her late husband’s business partner as the coffin is lowered into the grave and says to herself:

“If he wants the business, I’ll make him pay double,”

The Business Partner looks at the widow and thinks to himself:

“I’ll offer her a tenth of the value, she wouldn’t know what it is worth and without me, the business is worthless anyway”.

The benefits to you, your family, your business, your business partners and their families are:

For the surviving owners:

· Eliminates estate claims to management rights of the business;

· Prevents introduction of new owners with incompatible philosophies and agendas;

· Protects against control of the business being frozen through probate difficulties or legal restrictions if an owner loses legal capacity;

· Provides assurance of the opportunity to buy shares from the owner should they suffer a tragic event;

· Predetermines funding for the purchase, as well as the price of the business;

· Assures continuity of the business with minimal disruption; and

· Provides security for suppliers, staff and creditors.

For the estate of the deceased:

· Provides assured purchaser(s) for the business;

· Guarantees fair price as well as guaranteed funds to complete the purchase; and

· Reduces the delay between suffering the tragic event and receiving insurance proceeds.

If you are currently evaluating your investments and making your defensive plays – have a long hard think about the strategies you have in place to protect your most valuable asset – your ability to generate an income and what your family would do if you, the money making machine broke down completely.

*We are not making the stats up – here are our references:

1. Cancer in Australia 2001’, Cancer Series no. 28, Australian Institute of Health and Welfare, www.aihw.gov.au

2. ‘The Shifting Burden of Cardiovascular disease in Australia’, Access Economics and Heart Foundation 2005, www.heartfoundation.com.au.

3. ‘Heart, Stroke and Vascular disease’, 2001 Australian Institute of Health and Welfare www.aihw.gov.au

4. Calculations based on data from the Institute of Actuaries of Australia (2000) Interim report of the disability committee.IA Aust: Sydney

5. Year Book Australia 2006, www.abs.gov.au

6. ‘Injury Prevention Control’, 2005, Australian Institute of Health and Welfare,

www.aihw.gov.au

7 & 8. Prostate Cancer Foundation of Australia 2004, www.prostate.org.au/disease

“Information provided in this supplement is not intended to be personal financial advice and is for general information only. Readers should only act on the information after having received professional advice appropriate to their personal circumstances.”