Tuesday, July 25, 2017

Shouldn't I buy Insurance Online?

You should buy Insurance online to save the hassle of having to interact with an insurance advisor. BUT this is only relevant to products which don't need any advice.
It is just like going to a pharmacy: some medicines are over the counter medicines but some medicines need a doctor's prescription as they might have side effects or certain dosage requirements.
An example would be: for a cold and cough, you can buy over the counter; but if you are seeking treatment for cancer and need to buy a chemotherapy injection that is ONLY by prescription or it could be fatal.
It's the same with trying to buy an insurance product online. Some products are simple and easier to understand hence can be purchased online like Car Insurance or Home Insurance or Travel Insurance as they have been commoditized in most scenarios; but again if you have a high end painting in your house or a limited edition sports car and that needs to be insured speaking to a qualified insurance advisor is a requirement.
Just like in medicine where it is a matter of LIFE & DEATH... you do need a trusted and professional advisor.
When planning your financial future; looking at the unique changes of geopolitical risk, health risk, or risks unknown.... getting a professional advisor by your side is worth the effort of finding the right advisor.
I HAVE BEEN ASKED: Don't we have financial planning calculators online to do that for us?
So let me ask you: Don't we have self diagnosis website for medicine as well? But after we self diagnose, getting a doctor to sign off on certain illnesses is still the requirement to buy a prescription drug.
Similarly, you need a Financial Advisor to sign off on certain advice, like what combination of products is most effective? Should I only buy Term or only buy Permanent or should I buy a Combination?
Find an advisor you feel comfortable talking your personal agendas with and be open about your life objectives; Learn to self diagnose as well for smaller issues, learn to do self reviews as well.
For that ask for the "rules of thumb" financial advisors follow (28000 - Make Every Day Count is a book that provides these "rules of thumb" which is available on www.28000days.com)
Just like we have BMI to measure the ideal height to weight ratio we have similar "rules of thumb" in financial planning:
An example:
1. 10 times of Annual Income for Family Income Protection.
2. 20% of whatever you earn towards your Retirement.
If you are a client reading this:
Speak to your financial advisor today and read up to self educate;
If you are a financial advisor reading this: please share this with clients who you believe needs to read this...
And please always remember "Do not compare GOOGLE to my Professional Degrees"

When a critical illness claim is paid out... what should you do?

An observation & A case study:
A family recently was paid out a critical illness claim which was 5 times the annual income when the husband (who is tbe breadwinner) had a heart attack. The financial advisor gave the right advice to ensure the family had enough in the event an event such as this did happen.
However; What should they have done with this money versus what they did with the money...
Starting with what they did...
1. 6 months after receiving the money; he bought a new rolex watch.
2. The family went on a long summer vacation and spent in excess of 3 months of his salary.
3. Made a down payment to a new house and took the rest of the money for the property as a mortgage.
4. Bought a new car.
5. Renovated their current house.
At the end of spending all this; they were left with less than 3 months of income from the total pay out...
Do you think they made the right decision? Some might say.. well it is their money and they have the right to choose how and when and where they use the money; plus didn't he get to fulfill his desires? Also didn't he get a loving family vacation which should have helped him recover? And they did make some long term capital investments too didn't they?
Think about it:
1. The person is surely not insurable for an income protection ever again.
2. He did make a capital investment into a property but also took on a bigger liability than his investment.. which can't be insured in the event he has another major critical illness and we all know relapse is a possibility.
3. Purchased luxuries from an advance payment of income which they wouldn't have if they didn't get this pay out. (It was not a bonus from work... but it was treated as a bonus)
A lot of families are unaware of what to do in the event they do get a critical illness pay out in the form of a big lump sum of cash.
As a financial advisor it is our responsibility to guide them:
1. Build up an annuity so they keep getting basic regular income in the event he does need to take off from work in the future.
2. Keep money aside (if extra) for commitments such as school fees and or a more comfortable retirement; we all know for a fact even after suffering a critical illness longetivity of life is still an issue; people are living longer even after suffering a critical illness; or would you prefer being a burden on the Children?
3. If investing in a property, do not leverage the property as the liability may be to big to recover from in the event of another mishap and use the rental income to create an annuity.
4. Update insurance policies for other members of the family as if anything did happen to them; the breadwinner who already suffered a critical illness may not physically be able to handle the multiple responsibilities.
If you are a client reading this; have this discussion with your family....
If you are an advisor reading this; share this with your clients as they may not be aware of what to do....
Why not have this discussion with them when they are purchasing an income protection plan; in the event they do they this pay out; what should they do with it?
If you believe this is useful information please share this with people around you.

Saturday, July 2, 2016

Partnership Insurance (A Case Study)

Partnerships are made in Heaven; But not all Partners survive the ride through HELL.
 – Sanjay Tolani

What is partnership insurance and who needs it?

Many companies are built on the symbiotic relationship between partners, therefore protecting the value of that partnership is the key to success. Unfortunately, many are unaware on how to protect this value in the event of a mishap like death of a partner or loss of income due to an illness.

The idea is to protect each other’s interest by purchasing an insurance plan; where the company gets enough liquidity to be able to buy out the share from the deceased partner’s family or provide liquidity to hire managers to continue taking care of the responsibility of an ill partner. This liquidity will protect the company, the partnership and the family in maintaining the status quo.

Investors who invest into a running business, may want to protect their investment, by insuring the working partner, as in the event of an unfortunate illness or death the business would be without a captain to steer the boat away from the rough waters; and could cause big losses to the investor.

What can you include in your plan?

The plan is designed according to a partnerships need. For example, it can include an income protection cover; in the event of a major illness; a partner is unable to work for a long period of time, the productivity of the company may significantly be reduced. The company would be provided with a lump sum amount of cash to sustain this “Loss of Income”; thereby buying time for the partner to recover.

It can also include the involvement of a family member of the deceased partner in the business as a part of the inheritance and succession plan, or hiring a new manager to assist with the responsibilities.

A well designed plan also needs to be reviewed with changing circumstance, changes in responsibilities and changes in succession.   

A Real Life Case Study

Company ABC Ltd. had 3 partners; John, Jim and Jack. The three partners shared different responsibilities in the business and held equal shares. The Auditors had valued the company at US$ 15 Million.

Unfortunately, when John passed away; the partners had to decide what the future of the company would be. Would John’s family continue to get profits in equal share as the partners? Who will undertake the burden of John’s responsibility? If the partners want to buy out John’s shares; where will the liquidity of US$ 5 Million come from? Will the wife sell the shares?

Partnership insurance opens up many ways to handle such a situation. Discussing a succession plan, inheritance and liquidity to buy out shares can all be covered in the Partnership Insurance Document.

If you do care about the future of the business you are building, ensure to insure the partnership.  Please share this information with everyone around you. 

#sanjaytolani #speaker #author #28000days #mdrt #topofthetable #partnership #insurance #familyprotection #lifeinsurance #incomeprotection

Sunday, April 10, 2016

Health Insurance for Parents & Children living in Dubai

A lot of my friends had decided to send parents back to the home country from Dubai due to the compulsory medical insurance for them which is effective 30th June 2016 as it is very expensive to get coverage for senior aged parents.
Dubai Health Authority in collaboration with the insurer's have designed a basic product for "Sponsored Parents ONLY" . 
This is in line with the Health Authority Directive that everyone in Dubai should have health coverage by 30th June 2016.
If your "Parents" are sponsored by you in Dubai; you can now buy the basic DHA approved Medical Insurance for them for a flat rate of only AED 2500,
if your "Wife" is on your sponsorship the flat rate for the basic DHA Medical Insurance plan is AED 1750;
and for your "Children" on your sponsership the flat rate for the basic DHA Medical Insurance plan is AED 650.
If you have any questions on the above plans please email it to:


Monday, March 7, 2016

Summary of Economic News through February 2016

–      Global equities came under pressure in February, posting a negative return in US dollar terms. Perceived safe havens rallied for a second consecutive month with Treasury, gilt and Bund yields falling.   

–      US equities registered a small negative return. Investors deferred expectations for further rate increases after Federal Reserve chair Janet Yellen warned that global financial market turbulence could set back US growth.

–      In the eurozone, weak inflation data reinforced expectations of further monetary policy easing. In the UK, sterling came under pressure after a referendum on the UK’s membership of the EU was called for 23 June.

–      Japanese equities posted sharp declines amid doubts over the success of “Abenomics”, a stronger yen and concern over the slowdown in China.

–      Emerging markets outpaced their developed world counterparts. Expectations for stimulus measures in China spurred a rally in commodity-linked stocks. 

Sunday, January 3, 2016

Why do expats need to buy Life Insurance?

Without the right protection, families are sadly left with a burden of many expenses in the event of a tragedy. However, a proper life insurance policy can provide important funds to ensure the future of an expat’s family. Some of these expenses include:
1. Paying off obligations, permitting the family to be free from money related commitments to others
2. Resolving the estate, including paying legal costs
3. Giving resettlement back to the nation of origin
4. Covering future educational costs
Here are 3 ways how life insurance benefits expats and their families:
1. Provides Financial Stability
The aftermath of a family tragedy can be a troublesome, unpredictable period. It can take quite a long while for a family to fiscally settle after the death of the essential salary worker.
With a life insurance policy, a family can have the savings it needs to bolster its finances during resettling. This can give the family a cushion to get a stable wage, permit the family to stay in its present home, or supplant lost retirement funds.
2. Secures the Family's Future
Some protection policies can not only cover the family’s primary income earner, but the spouse as well. Insuring the spouse on the off-chance something happens, permits one insurance policy to do the work of two. While one naturally hopes no sudden tragedies occur, this layer of protection guarantees a family's financial future regardless of which spouse may unexpectedly pass.
3. Helps Ensure a Bright Future for Your Children
A primary reason why expats select their careers is to provide stability for their families. As expats spend their time overseas, there is a higher risk something unforeseeable could happen. Obtaining an insurance plan that meets the needs of an individual and his or her family can provide essential funding after a sudden tragedy. The right type of policy can help cover educational expenses, weddings, and other important events in the children’s lives.
What to Look for in a Life Insurance Policy
Finding the right life insurance policy requires a careful evaluation of a family’s needs, the type of insurance needed, and other important factors.
Expats should consider the following when choosing a policy:
1. Medical underwriting limits
2. Borderless coverage, especially for expats and frequent international travelers
3. Benefit limits
4. Whether premiums are fixed throughout the policy term
5. The type of coverage needed, such as Deaths All Causes as a result of illness, accidents, and acts of war and terrorism; or Deaths Natural Causes in high-risk areas
6. Eligibility age
7. Types of exclusions
8. Term renewals (for example, every year or every 10 years)
How Much Coverage Should I Get?
According to the Life Insurance and Market Research Association, experts recommend having enough life insurance to replace income for 7 to 10 years, but each individual must calculate their beneficiaries’ future financial needs. Several factors (such as age, children, mortgage, income, etc.) must be considered to determine the appropriate amount of life insurance coverage.
Source: Clements Worldwide
To know more: please read "28000- Make Every Day Count"
Available on: www.sanjaytolani.com

Saturday, January 2, 2016

What is your Biggest Asset?

You create the Assets for your estate and family...
What is more important? You or the Assets?....
NOW...Which is insured? .....
Research suggests that most people are insured less than the assets they own... just shows how much we ignore the source that builds the assets. 

Insure yourself and the income which builds your estate.