Why we need to talk about insurance on the farm

I got into financial planning thinking it was about the latest stock tip, but as I started working as an adviser, most of the work I was doing was around life insurance and providing a sense of security for people from different walks of life. 

While working in insurance, I learned a great deal along the way – life is uncertain, that much is certain, and having a good insurance policy in place can help protect your business, your life, and the lives of your family members during times of uncertainty. 

Let's face it...

Insurance is on the list of things that no farmer really wants to talk about – we get it. It can be uncomfortable, it can seem unnecessary, and there’s no doubting that the first thing we think about at the mention of insurance is the expense of it. But the thing is, we really need to talk about insurance.

So, why do we need to talk about insurance on the farm?

I believe we avoid thinking too hard about insurance because it can cause us to experience negative emotions. Topics like death, total and permanent disability, trauma, injury and illness are not things we want to discuss, but setting aside the time to think about your options if something unfortunate does happen can help us experience positive emotions, like reassurance in the face of adversity and knowing that we (ourselves, our families and our farms) are covered should something go wrong. 

Having been a financial planner for some time now, I’ve personally seen the implications of those unlikely events happening and what it does to the whole family when there’s no backup plan in place. It's not good, and most importantly, the worst of the fallout possibly could have been avoided had they set aside the time to talk to their adviser about insurance.

So, why is insurance so important?

One of the most important things we need to consider in farming is the risk to the key person involved in the business. That is, insuring the farm's key person in order to provide a degree of certainty to the family, the farm, and the business in the unlikely event that something should happen.

We can insure against the level of debt you may have, as well as taking into consideration your goals as a family. For example, if you’ve got children who are still at school and you want to ensure they can still do things off-farm once they graduate, taking out insurance can help reduce the pressure in the unlikely event of something happening.  

Minimising costs associated with Insurance

Sure, insurance is expensive, but the better question to ask is what happens to your family if you don’t have it and something goes wrong on or off-farm?

Before you throw the idea out as a waste of time, it’s good to know that there are things that can be done to minimise the costs involved in taking out a life insurance policy. In fact, as part of your strategy, we can look at self-insuring, using products or building up assets as alternate ways to help pay for it. 

I always tell my clients “You take out insurance when you don’t need it because when you do need it, you can’t get it.” In this case, it’s not just about paying a premium for life insurance, it’s about getting the best cover when you need it most. 

No one really likes to pay the premium for a life insurance policy, I certainly don’t, but it does have its place in creating financial security and a bigger future for your family and your farm. 

The moral of the story?

By taking out insurance, you can help remove the financial pressure that may usually come with accident, injury, or illness, and instead focus on your energy on recovering, giving you the time and to heal, and move on. 

We need to talk about insurance because it’s important to ensure that you, your family, and your business are protected so that both it and you can be here for the long haul. It’s important that we have these discussions and it’s important to review your life insurance on a regular basis.

To discuss your insurance needs, book an appointment with Matt.

Want us to take a look at your insurance?

Contact the team at Lifesolver Financial. Leveraging over 30 years of experience working with farmers, our team can help you with everything you need to achieve farm business success and a bigger future. Call us on (02) 5750 0519 or reach out to Matt: Info@lifesolver.com.au *This blog/article is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances. If relevant: Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.