Liam Croke - Look to the future and ensure your family is covered

“Everybody will die, but very few people want to be reminded of that fact.” - Lemony Snicket, The Austere Academy

“Everybody will die, but very few people want to be reminded of that fact.” - Lemony Snicket, The Austere Academy

I used to play quite a bit of tennis when I was in my teens and it was a game I absolutely loved; you could say I was obsessed with it. I was fortunate to have represented my country many times and over those years quite a number of my opponents and team mates have become lifelong friends.

I haven’t played much in recent times, but last year I was walking into the city centre one day when I bumped into someone I hadn’t seen in years.

I had played against him many times and it was great to see him after so long. We got talking about the “good ol’ days” and we both admitted that we hadn’t played in ages and we missed it.

Given that he had relocated to Limerick from Dublin, we agreed that it would be mad if we didn’t start playing again, so we did and boy was it great.

Out of the blue earlier last year, I received a call from him to say that he wouldn’t be able to play tennis with me anymore. My first thought was that, yes my game wasn’t has good as it used to be but I wasn’t that bad. Had he found someone else to play with?

No, he told me he hadn’t found anyone else – he couldn’t play anymore because he had just been diagnosed with pancreatic cancer and had three months to live.

I remember him saying to me “Liam, my family are not prepared for this, can you help us?” He asked me to call to him and his wife in a couple of days so that we could talk about his financial affairs and what he needed to get in order now before he passed away and what needed to be done when he did.

Obviously when I called to see them both, it was very emotional and his wife actually looked more ill than he did because her eyes were all red and bloated from crying and lack of sleep.

I started by getting them to gather all their legal and financial papers, and we spoke about what life assurance policies he had in place etc.

Let me fast forward five months following that awful phone call because my friend by then had passed away.

For those months after his death, I stayed in contact with his widow to make sure she was OK and to liaise with the life assurance companies to make sure that his life policies were paid out to her, and advise her what she should do with the money, how she now needed to manage her finances as a single parent and so on.

But I will never forget just before Christmas meeting her when she gave me a big hug, and said thank you for helping her and saying “I wouldn’t have known how to handle everything or where to even begin”.

This subject matter is obviously one that is very uncomfortable for people to talk about, I mean the prospect that you or your partner could die prematurely leaving a young family is just too excruciating to even contemplate, so people take the easy option and don’t.

First of all as a human being with a young family of my own, I am absolutely aware that there is nothing you can do, that would alleviate the pain and torture your family would endure if you were to die.

However, in my capacity as a financial advisor, I know how you could make things slightly more bearable for them by making sure they are not going to be financially devastated as much as they will be emotionally, by ensuring you leave them with enough resources in place that they can use and rely on after you are gone.

Suffering an accident or a sudden illness are things that may be beyond your control, but being prepared and having your family protected if something terrible happens is.

When we think of things that we personally believe are financially “at risk” we think of our pension funds invested in the stock market, our savings on deposit, our jobs etc. and we do something about it.

We move our money to banks that are covered under the government guarantee scheme, we move our pension to less riskier funds but we never think of the risk that could descend on our families at any time and the impact it could have on them; isn’t it about time we all began doing something about it?

When I ask people what life cover they have in place, they always reply that their mortgage is covered (if they have one) and they are covered by their employer as well.

Many people are covered under what is called a “death in service” benefit where their employer will pay usually three or four times their annual income. This is actually a terrific benefit organisations make available to their employees and one that employees often under-appreciate.

However, I still have two problems with this answer: if your mortgage is paid and that is all the life cover you have then, whilst there is no mortgage repayment anymore, you are still putting your family under huge financial pressure.

Where for example is your partner going to get the funds to put your kids through college now that your income is gone? Who is going to look after them if your partner has to return to work or work longer hours if they are already working?

Whether you are covered by a death in service benefit or not you should not rely on having this cover only; it may not be enough.

If there are people in your life who are financially dependent in any way on the income you earn, then you simply can’t afford not to have life cover in place.

If your children, partner, elderly parents or siblings depend on you and you do not have cash or any other assets that they can live off if you passed away then you need to protect them.

The best way to provide for their financial security is, in my opinion, having a life assurance policy in place for them.

And I think you will be surprised how small the monthly premiums can be and how affordable life cover actually is.

For example a €150,000 20-year term policy for a healthy 45-year-old male and female is just €0.66 cent per day. Don’t you think your family is worth that much each day?

Next week I will tell you what type of life policy you need to take out, which is very important, and how you can arrange this without having to pay anyone commissions or fees in the process!

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