By Dave Kavanagh
Of course, nobody wants to consider that something bad and impactful will happen to them, but most people realise that every week in Ireland there are unexpected fatalities, serious illnesses diagnosed or injuries/illnesses that prevent someone from working. One of the main impacts of any of these occurrences, is the financial loss that can be suffered either by the individual concerned or by any family members dependent on them. The amount of financial loss can vary greatly, and will depend on the event and also the person’s circumstances. The easiest one to consider is the impact of a fatality. Is there an immediate loss of income? Will there be an entitlement to pension benefits? Is there a dependent partner and/or children? If there are children what age are they and how long will they need to be provided for? What protection benefits are already in place? Is there a mortgage that is protected? Are there any death in service benefits with an employer? Giving consideration to these questions can identify what the potential loss would be and help calculate the appropriate levels and types of cover required. Where an accident or illness prevents someone from working, what is the impact? Does an employer pay them for a period of time? If so, for how long? Would some people be forced to use up their savings in order to make sure that bills are paid and supplies bought? The diagnosis of a serious illness can have a negative impact on finances. In some cases it may just result in a relatively short period off work, a stay in hospital and perhaps a supply of medications. But in others, it could result in never returning to work, needing a downstairs bedroom, a wheelchair accessible shower and a modified car. Having a tax-free lump sum paid out at these times can make a huge difference in someone’s finances. The important thing is for people to consider their own, specific circumstances and the financial impact it would have on them and their family. This will allow them to plan more accurately, but in order to consider these details, you have to make the time to analyse them.
Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or for information (with no cost or obligation) he can be contacted by emailing Dave directly on firstname.lastname@example.org or you can use the contact form on www.financialcompanion.ie or @Davekav_advice on Twitter and Instagram. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.