It was one of those events that you think will never happen. A guy in his 40s dies suddenly from a heart condition that neither he nor anyone else knew about. When I heard the news I went numb. He was my friend and also my client.
He left a wife and 4 young children. He also left a thriving business that depended on him.
How do you deal with things like this?
This tragedy happened just on 20 years ago. As I look back I have noted some key things that helped those involved get through:
- A group of close business friends set up a management committee to oversee the business while it was groomed for sale – they reported regularly to the widow
- A general manager was promoted from within to run the business
- Our firm was responsible for the monthly financial reporting to the management committee
As a result of the above the business ran well and was eventually sold leaving a good amount of money for the widow and her boys.
When a key person like my friend dies suddenly there can be a huge pressure on finances when you have a profitable but undercapitalised business. Fortunately, my friend had taken out enough insurance to give an immediate injection of cash into the business as well as provide a good sum for his family. Without that insurance pay-out the situation could have been very difficult.
Over the years since (and with the above story ringing in my ears) we have assisted a number of our clients into the right amount of insurance cover. I am a believer in this to the extent that we have set up a strategic partnership with an insurance specialist. Your insurance cover doesn’t have to be huge but it needs to be enough to help you sleep well at night.
I’ll be talking more about this story with our clients over the next year.
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