third party insurance and how effectively are we covered??
Interesting discussion today about a third party insurance claim.
My sister in law was injured in a crash, although a minor crash where she was rear ended she suffered a pinched nerve in her neck which has left her incapacitated. As she would still have 20 years of work ahead the claim will be in excess of $4mil, based on an earning capacity of $200kpa.
Looking at my own situation for the last 10+ years I have controlled my own level of earning leaving most of the money in my structures to be reinvested. I have carried and continue to carry life insurance in the 7 figures, but it is not income insurance. The reason I never saw income insurance as important as the policies I looked at were tied your income and as such were a waste of time and even more so as my business would have continued without my direct involvement.
Anyway, my situation has now changed and the intention is that I will only draw franked dividends, which as I understand will not be recognised in the 3rd party insurance situaion as income that I am earning through my direct exertion.
So in both situations I am worse off as I get no effective cover from any 3rd party accidents should I ever be involved, although my family would suffer hardships without my direct involvement in managing all my financial affairs.
How have other people dealt with this situation? taking out truama insurance? to what level? I assume that if I was to seek cover for anything in the range of $4mil+ it would become very expensive and also not deductable.
Cheers
Interesting discussion today about a third party insurance claim.
My sister in law was injured in a crash, although a minor crash where she was rear ended she suffered a pinched nerve in her neck which has left her incapacitated. As she would still have 20 years of work ahead the claim will be in excess of $4mil, based on an earning capacity of $200kpa.
Looking at my own situation for the last 10+ years I have controlled my own level of earning leaving most of the money in my structures to be reinvested. I have carried and continue to carry life insurance in the 7 figures, but it is not income insurance. The reason I never saw income insurance as important as the policies I looked at were tied your income and as such were a waste of time and even more so as my business would have continued without my direct involvement.
Anyway, my situation has now changed and the intention is that I will only draw franked dividends, which as I understand will not be recognised in the 3rd party insurance situaion as income that I am earning through my direct exertion.
So in both situations I am worse off as I get no effective cover from any 3rd party accidents should I ever be involved, although my family would suffer hardships without my direct involvement in managing all my financial affairs.
How have other people dealt with this situation? taking out truama insurance? to what level? I assume that if I was to seek cover for anything in the range of $4mil+ it would become very expensive and also not deductable.
Cheers
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