We recently contributed to Your Investment Property Magazine in looking protecting your investments through well planned risk protection.
We are property investors ourselves, so we know what it means to manage properties, look at risks, and make sure our portfolios and plans are secure through good management. Personal insurance is a main part of this.
See the article HERE or read below:
PROTECT YOUR LEGACY
You work hard to build a diverse property portfolio in the hope that it will allow you to retire with no financial stress.
But if you succeed in that goal, what happens next? For instance, if you pass away or become disabled and you own a hefty portfolio of properties, what will happen to your wealth?
Without life insurance, your family risks losing it all – and worse, having your debts foisted upon them. That’s not a legacy most of us would be happy to leave behind.
“This is the big one to work out, in terms of finding a balance of how much coverage you need. It will really depend on your situation,” says Davies.
“If you’ve got children and your partner is working, then it may not be necessary to have a huge life insurance payout. But if your partner isn’t working and therefore doesn’t have an income, how much will you need to cover your bills and your investments if they’re gone? You want to avoid a ‘ﬁre sale’ scenario, if you can.”
He suggests that investors consider the ‘DIME theory’:
• Debt – what are your personal
• Income – how much do you need to hold your portfolio and cover your expenses?
• Mortgage – what is the value of all your mortgages combined?
• Education – how much will it cost to educate your kids?
“I’ve had a couple of clients recently with very different situations.
“One is a couple of people who are 25 years old with three properties, but they’re both in high-paying jobs. If one of them were no longer around, the other would continue working and could easily service their property bills.
“The other is a family with seven properties, but the mum is a stay-at-home parent to three kids. In this instance, his life insurance needs to cover quite a lot more if he dies.”
It is worth speaking to an insurance professional about your situation to ensure you get the insurance you require, and your family is left with a positive legacy.
Source: Your Investment Property Magazine