Are you a one-man band or the owner of a small business? Whether you are a small business owner, a tradie, or a freelancer, having life insurance protection is important.
This article will tell you everything you should know and how to get access to expert insurance advice for entrepreneurs.
Why Entrepreneurs & Self-employed Need Life Insurance?
In 2021, 2.2 million Australians were self-employed. While the ordinary Australian is typically employed under a larger group, often supported by a default superannuation fund of the employers’ preference and also workers’ compensation, those who are self-employed may not have the same luxury. With workers’ compensation typically not applying to sole traders (while also being very limited in its coverage), income protection can provide even more value than it does to an employee.
If you are self-employed, you will know that you face unique pressures and stresses that employed life often relieves us of. These stresses can often manifest in various illnesses, and it is therefore critical that you are adequately covered and prepared for such an event to transpire. Aside from this, the last thing you would want is for your business to materially suffer or have to pivot in the event of you being unable to work for a short period of time.
Navigating The Financial Risks Of Entrepreneurs & Self-Employed
Being on your own is both rewarding and high-risk as far as your career is concerned. You have to manage and grow a business, all while still being subject to life’s uncertainties, such as disability, illness, or premature death. As an entrepreneur, these incidences can derail your family’s wealth and your business. Below are the common financial risks entrepreneurs and the self-employed face:
Individual and Family Financial Stability
- Loss of income: Being unable to work due to illness or injury can result in your income reducing or ceasing entirely.
- Family financial support: The untimely passing or diagnosis of a terminal illness to a loved one can prevent you, the business owner, from working. This could significantly impact your capability to provide for your family.
- Unpaid debt: Entrepreneurs are good at using debt to make their business grow. However, should they become unable to work due to disability or premature death, debts can become a huge financial burden, and lenders may not be compassionate to their circumstances.
Business Stability for Entrepreneurs
- Loss of a key person: For every business, there is a key person that drives profitability. Losing a key person can cause a significant decrease in the business’ profitability. Either hiring or training for a replacement can cause expenses for the business.
- Business succession: Business continuity means successfully passing on the business to someone in case of premature death or being unable to work due to disability or terminal illness.
Business Operations
- Initial business expenses: At the start of every business, managing the day-to-day expenses can be challenging especially if the owner becomes unable to work.
- Employee retention: High employee turnover will negatively affect the business operation, resulting to unstable profit.
Insurance Solutions For Entrepreneurs and Self-employed In Australia
Now that we have identified the financial risks, figuring out how to mitigate them is the next step.
Curo Financial can help you with any of the following financial solutions for your business or your personal finances. Our team can provide expert insurance advice for entrepreneurs and the self-employed.
Life Insurance (death coverage)
This provides a lump sum benefit to the entrepreneur in the event of untimely death or diagnosis of a terminal illness. The payout can provide financial support to the family or funding for the business.
Income Protection Insurance
In case of being unable to work due to injury or illness, income protection insurance provides up to 70% of your pre-disability income. The amount can be used to cover your monthly living expenses until you recover. For self-employed with fluctuating income, your previous 24 months of income can be considered, depending on your policy.
Total and Permanent Disability (TPD) Insurance
Accidents and severe medical conditions can permanently disable an entrepreneur. Life uncertainties such as total and permanent disability can drain the entrepreneur’s savings and business to cover treatment and recovery. TPD insurance for entrepreneurs and self-employed can provide financial support during emergencies.
Trauma Insurance
This policy pays a lump sum benefit in case the entrepreneur suffers a major trauma or illness such as cancer, heart attack, or stroke. The payout can cover the costs of medical bills, treatment, or recovery.
Key Person Insurance for Entrepreneurs
When a key person such as an employee passes away or becomes totally and permanently disabled, this policy pays a lump sum benefit to the business to offset the financial impact of the key person’s exit.
This insurance can provide extra funding to the business to keep its operation.
Buy/Sell Insurance for Entrepreneurs
Businesses with multiple partners, the buy/sell insurance provides funds to the shareholders to buy the deceased shareholder’s shares. This insurance can be used as part of the company’s succession plan.
Business Expense Insurance
This insurance covers a portion of the business’ fixed monthly expenses if the owner is unable to work due to illness or injury. It can help the business stay in operation while the owner recovers.
How Can Curo Financial Help Entrepreneurs and Self-employed?
Insurance policies can be overwhelming to understand, and finding the best insurance for your needs takes a significant amount of research and financial understanding. Even if you have the time and energy to attempt this, the most comprehensive insurance offerings in Australia cannot be accessed without a financial adviser or broker assisting you.
Working with expert insurance advisers, such as Curo Financial, is highly beneficial and typically comes at no cost to you. Our team has decades of experience working with entrepreneurs and the self-employed to provide expert insurance advice. Our goal is to help them make an informed decision so they can have peace of mind and focus on their careers and business.
Here is how we work with our clients:
- Our first step is to understand our client’s financial situation and goals
- Then, we identify the personal or business-related financial risks that need to be mitigated
- After we identified the insurance gaps, we will develop a customised insurance plan that best suits your needs
- As the entrepreneur’s business and net worth grow, their need for financial risk mitigation also follows. That is why we regularly conduct a policy review with our clients to make sure that they are financially covered.
Get in touch with our team to know how we can help you and your business.
Why Should Entrepreneurs and Self-employed Choose Curo?
Working with Curo Financial, you are assured that you will be getting 100% expert and professional financial advice.
Holistic Approach: We understand the financial complexities of entrepreneurs and self-employed individuals. We also consider the impact of taxes on our clients in our insurance advice.
Qualifications and Licensing: Our team is religiously adhering to the implementing rules set by the Australian Securities and Investments Commission (ASIC). We make sure that our advisors are up to date with the Australian Financial Services (AFS) License to handle your financial queries.
Client-Centric Approach: We only work in the best interests of our clients, prioritizing their needs over our gains. We act as your representatives and advocate.
Transparent: We make sure that our clients understand all the pros and cons of our financial advice and the costs involved. We also provide a Financial Service Guide (FSG) to our clients to let them decide on whether to engage in our financial advice services.
Record-keeping: We keep detailed documentation of the whole service from the financial advice, details, and reason for the financial recommendations. This is highly beneficial to clients when they want to trace back the reason for the financial services they engaged years ago with our team.
Our Expert Financial Advisors Are Here For You
At Curo Financial, our goal is to make your financial success our goal. We will work closely with you to know your financial goals and status. We will put our decades of experience into helping you untangle your personal finances and make them work with you on your entrepreneurial journey.
Customised Financial Planning for Entrepreneurs and Self-employed
Entrepreneurs have complex financial situations and goals. A standard financial plan does not suit their lifestyle and needs. With Curo, we customise all our financial planning approaches based on the data that we get from our clients. We then pour our expertise into every aspect of financial planning to guide entrepreneurs to make an informed decision about their finances.
We value our business based on the lifetime relationships we have with our clients. Our goal is to be your lifetime financial advisor for every financial need you may have.
What Our Clients Have to Say
We strive to do our best for our clients from the moment they reach out to us, to help them with their claims. But do not just take our word for it. You can read what our clients have to say here.
Want Proven Financial Advice?
If you are an entrepreneur who needs help in getting more organized with your finances and wants to know how you can maximise your wealth even more, we are happy to help.
One of our team will get in touch with you.
Frequently Asked Questions
How can insurance help entrepreneurs?
An insurance policy can provide financial support to the entrepreneur for the stability of the business, to cover medical expenses, or to support the family. Depending on the type of insurance, the payouts from insurance coverage allow the entrepreneur to have a financial runway in case of life uncertainties.
What is the best insurance for entrepreneurs?
Different types of insurance address different financial risks for entrepreneurs. Working with an expert insurance advisor such as Curo Financial can help you identify your financial risks and match them with the best insurance solutions.
How much does insurance for entrepreneurs cost?
The type of insurance, age, amount of coverage, and health risks can determine the cost of insurance. Having an expert insurance advisor can present you with multiple insurance options to consider.
How can I protect my business?
Taking out insurance policies such as key-person insurance and buy/sell insurance can help entrepreneurs protect their business’s financial stability and longevity. It allows the businesses to access funds in case unforeseen events happen to their key person and have a ready fund to buy out a share in case of succession.
