Rick Mapperson was recently interviewed by the Sydney Morning Herald regarding the price of insurance and online insurance sites.

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As a personal insurance broker with more than 20 years experience, Rick has seen many changes in personal insurance, and also the problems that can occur with online insurers and funeral plans that have become popular recently.

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Australia is one of the most underinsured nations in the developed world. There are a number of reasons for this including:

- Personal insurance is not tailored

- Assuming insurance within superannuation is adequate

- Not understanding differences in policies.

- Not calculating your needs accurately.

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Rick explains that there are many different kinds of personal insurance and not all will suit the person or provide adequate cover. Understanding the differences in personal insurance policies can be like reading a new language for the first time.

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“A common trap is the definitions of terms used in the fine print, such as ‘own occupation’ and ‘any occupation’. For example, if a surgeon is insured under ‘own occupation’, they will be paid if a hand is lost in an accident leaving them unable to do surgical work. However, if the surgeon is insured under ‘any occupation’ and can still work as a GP, only a partial claim will be paid,” explained Rick Mapperson.

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Here is an excerpt from the article published in the Sydney Morning Herald:

Personal-insurance broker Rick Mapperson says there are inherent dangers in finding the right cover.

”A lot of people are doing it online now, and even using online search companies that say they will do it for you.

”But while they may find you the cheapest cover, that’s not necessarily the most appropriate cover … it’s not a one-size-fits-all situation,” Mapperson says.

”There are things you just can’t decipher through a search engine.

”It doesn’t know if the client has a pre-existing condition such as a back problem, which companies are going to be the most accepting when it comes to that condition.

”I know that from experience.”

Rick Mapperson was recently interviewed by Dynamic Business magazine regarding personal insurance for business owner. These tips and guidelines really apply to anyone.

Many Australians are unknowingly under-insured. In other words, they think that they have adequate cover but they actually don’t. Have a read of the article to make sure you don’t fall into the trap of being uninsured for unnecessary things or under-insured for the most important things.

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Here’s an excerpt of the article:

Rick Mapperson, director of Rick Mapperson and Associates, agrees that planning ahead for your business is just as important as the initial planning stages of a start-up business. “But it need not be as daunting,” he adds.

Tragically, many small business owners who cannot work due to unexpected injury or illness can’t afford the cost of living and find themselves having to the sell their business. This is where Income Protection comes in. Income Protection policies can replace up to 75 percent of your salary if you are unable to work due to unexpected illness or injury, as opposed to Workers Compensation, which covers your employees against injury or death in the workplace.

“Small business owners are the most important asset to their business, and their insurance cover should reflect this. It is important for small business owners to have Income Protection because it means that they don’t need to rely on their business to pay the bills. Instead of facing the possibility of losing the business to cover costs, a succession plan kicks in and their income protection insurance helps pay the bills instead,” Mapperson says.

Small business owners’ income tends to fluctuate and is often more complicated than employees of medium-to-large sized businesses. For example, income may be determined by the profitability of the business at any given time, and it may come from multiple sources or even double as business savings.

“There are many different kinds of Income Insurance and not all will suit the small business owner or provide adequate cover. And understanding the differences in Personal Insurance policies can be like reading a new language for the first time! You can save yourself a lot of time and money by talking to a specialist in Personal Insurance that can assess your situation and offer for the best solution.”

Personal Insurance within Super

Many Australians are unknowingly underinsured. In other words, they think that they have adequate cover but they actually don’t. On a daily basis, Mapperson has to battle with the incorrect assumption that Personal Insurance within superannuation is sufficient. In most cases, this isn’t true. Rice Warner Actuaries estimate that Life Insurance cover within superannuation is on average only 20 percent of what is needed.

“Personal Insurance and superannuation don’t always work well together. Think of it like this: insurance is an expense; superannuation is an investment.”

When Mapperson is designing insurance packages for self-employed people, he always suggests Business Expense Insurance or Business Overheads Cover. This covers up to 100 percent of the regular fixed operating expenses of your business (costs such as rent, business mortgage instalments, staff salaries and leases) if you are unable to work due to illness or injury. Business Expense Insurance can be purchased on its own or as part of a package with your Income Protection, so it doesn’t have to get overly complicated.

Life Insurance

And then there’s Life Insurance. This is a must for small businesses, especially where there are debts associated with the business or the business owner. Fortunately, Life Insurance can be structured so that it is tax-deductible.

“Whether you are starting or growing a small business, there are many things that allow for a DIY approach, and there are others like insurance that you simply can’t afford to do yourself,” Rener Lao of AccountsTeam reminds us.

One of the reasons for this is that there are common traps in the definitions and fine print of all insurance policies. Mapperson explains: “With Total and Permanent Disability Insurance, for example, there is the option of selecting ‘own occupation’ and ‘any occupation’. If a surgeon is insured under ‘own occupation’, they will be paid if a hand is lost in an accident leaving them unable to do surgical work. However, if the surgeon is insured under ‘any occupation’ and can still work as a GP, only a partial claim will be paid, or even no payment at all.

“This is why it’s wise to talk to a specialist personal insurance broker who can assess your situation, calculate the level of protection you need, understand the fine print and translate your options to provide you the most affordable and tailored solution. Personal Insurance brokers are independent and free to the consumer. For example, a good broker will know that some types of Needlestick Cover for the medical industry only include HIV and do not cover Hepatitis B and C.”

Getting your level of cover right and structured in a way that is tax effective could mean an extra few hundred dollars in your pocket each year. Or it could mean that your business is still running in a year’s time, should you or your business suffer some form of misfortune. In short, it means everything.

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To read the full article, go here: Are you under-insured, over-insured, or just plain insured?

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Managing Director, Rick Mapperson, was recently interviewed by My Business magazine. Here is an excerpt of the interview and article that was written about him:

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Sydney-based Rick Mapperson is Founder and Managing Director of personal insurance brokerage small business Rick Mapperson & Associates. Rick has been insuring people, for 20 years. In this Q&A, Rick explains how he combines his skills as a licensed Financial Planner and his experience as the co-founder of an Australian charity focused on families to better understand the best interests of his clients.

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My Business: What’s the one thing you wish you’d known before you started in business?

Rick Mapperson: I wish I had been aware of all of the challenges that are involved in starting up a business. However, I’ve found confronting these challenges to be extremely rewarding, and I think it’s something that everyone who starts up a business has to go through, almost as a rite of passage.

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MB: Best business decision you’ve ever made?

RM: Employing a PR and marketing agency to offer me some direction and to help take my business to another level. They have more than paid for their services through the resulting increase in sales. My business has also grown a result of me hiring a Personal Assistant, which gives me more time to work ‘on’ my business.

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MB: How do you delight customers?

RM: Customers have high expectations for us to be proactive in keeping their insurances up to date and also for our products and services to be competitively priced. So, we aim to delight our customers by ensuring we’re always one step ahead when it comes to changes to insurance policies and pricing. I contact them with options and suggestions for better cover and even cheaper prices when available, before they need to contact me.

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MB: Favourite piece of business technology? Why?

RM: I wouldn’t be able to cope without my smartphone. It allows me to stay in touch with clients and work colleagues and it also helps me to keep on top of things in and outside the office. Clients have the right to expect quick responses to their queries, and being out of the office can no longer be a reason for delays.

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MB: Best tip for managing people?

RM: For a business to be successful, it’s important that management takes the time to properly evaluate its employees and offer feedback. This is the only way that employees learn from their mistakes and get recognised for activities they have performed well.

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MB: What’s more important in business: passion or preparation? Why?

RM: Passion. You need to know why you’re doing what you’re doing. If you’re just doing something for the sake of doing something then your lack of enthusiasm will eventually be uncovered and you won’t experience the success that you might have in another area where you have more of a vested interest. In addition to my business, I’m also passionate about helping people who would otherwise not have a voice and whose needs often go unmet – this compelled me to found a charity called Breakthrough Houses. Ultimately, passion motivates me to do well, which involves good preparation.

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MB: If someone gave you $100,000 and said, “Invest this in your business by the end of the week – or lose it”, what would you do? RM: I would give a large portion of it to Breakthrough Houses, which is a charity I co-founded and am able to support with my business profits. With the remaining money, I would employ an additional sales person.

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To read the full interview, go here: My Business meets insurance broker Rick Mapperson

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We wanted to share with you this article that recently appeared in a newspaper. We’d love to hear your thoughts in the comments section below.

-Rick Mapperson and Associates

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Rick Mapperson

Above all of the horrific stories in the news each day of neglect, child abuse, additions, homelessness, loneliness and family break ups, is a charity that is changing tragic statistics in Sydney – one family at a time.

Breakthrough Houses is an organisation that was established by husband and wife team Rick and Kerry-Ann Mapperson. After devoting many years to providing emergency foster care, and seeing for themselves the destruction of the family unit, Rick and Kerry-Ann realised that a desperate need existed for a support function that would prioritise the family unit.

With the assistance of committed and skilled professionals, Breakthrough Houses became a reality in 2004.

Breakthrough House, is a caring, supervised and safe home for families at risk to live in whilst undergoing rehabilitation and learning vital life skills. Parents and children can remain together so that they can learn to live peacefully, as a family. They are housed in a supervised and supportive environment that offers guidance, counselling and real world assistance.

The Breakthrough Houses program equips resident families who are at risk of displacement with the necessary skills that they lacked so that families can stay together.

Rick and Kerry-Ann Mapperson explained, “Rather than be the ambulance at the bottom of the cliff, Breakthrough Houses aims to be the fence at the top of the cliff.”

Breakthrough Houses is funded by donations and Rick Mapperson’s business, Rick Mapperson and Associates, a personal insurance brokerage. They are currently looking for corporate sponsors to enable more residents to stay at Breakthrough Houses.

While in the Breakthrough Houses live-in program, professionals teach them healthy living, parenting skills, relationship counselling and teaching, financial management, employment skills and life skills. An accountability structure is in place to help ensure long-term change that affects the entire family.

For more information, visit http://breakthroughhouses.org.au/

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None of us would ride in a boat that did not have enough life jackets. Despite this protective instinct, Australia is one of the most underinsured nations in the developed world[1].

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More than three in four Australians will be diagnosed with a serious illness in their working life. This is why personal insurance is vital.

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Research has consistently shown Australians don’t take out adequate levels of insurance to protect themselves and their family. Research commissioned by the Investment & Financial Services Association in 2005 showed parents with dependents were critically underinsured by $1.37 trillion, and that only 4% of the total population with dependent children have adequate levels of life insurance cover. That statistic is expected to be even worse today.

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There are a number of reasons why Australians are underinsured. Take a look at the four main reasons and see if you have fallen victim to any of the common mistakes.

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Mistake 1: Personal insurance is not tailored

The key reason many Australians are underinsured is because they do not realise that their personal insurance should to be tailored to suit them, and regularly reviewed to make sure cover is adequate. Not only will this save them money, but it will also accommodate their unique circumstances such as multiple income streams, family situations, health record and occupations.

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Mistake 2: Assuming insurance within superannuation is adequate

Another reason many Australians are unknowingly uninsured, is the incorrect assumption that there is enough personal insurance within superannuation. Rice Warner Actuaries estimate that life insurance cover within superannuation is on average only 20% of what is needed. There are many reasons why personal insurance and superannuation shouldn’t be put together. For example, insurance is an expense while superannuation is an investment.

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Mistake 3: Not understanding differences in policies

There are many different kinds of personal insurance and not all will suit you or provide adequate cover. Understanding the differences in personal insurance policies can be like reading a new language for the first time.

A common trap is the definitions of terms used in the fine print, such as ‘own occupation’ and ‘any occupation’. For example, if a surgeon is insured under ‘own occupation’, they will be paid if a hand is lost in an accident leaving them unable to do surgical work. However, if the surgeon is insured under ‘any occupation’ and can still work as a GP, only a partial claim will be paid.

It is wise to talk to a specialist personal insurance broker who can assess your situation, calculate the level of protection you need, understand the fine print and translate your options to provide you the most affordable and tailored solution. Personal insurance brokers are independent and free to the consumer. For example, a good broker will know that some types of Needlestick Cover for the medical industry only include HIV and do not cover Hepatitis B and C.

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Mistake 4: Not calculating your needs accurately

It is often in the ‘calculation’ phase that people underinsure themselves because it is easy to forget and underestimate the burden that personal insurance needs to carry. For example, it costs around $450,000 for the average Australian family to raise two children from birth to age 20. That does not include a home loan (on average $216,500) and an average of $14,500 in other debts.

The Australian Bureau of Statistics reports that 4,400 parents die every year and leave dependant children behind. Many of those parents never thought they would die before the children were grown, and were therefore underinsured.

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Don’t leave yourself, your family and your business exposed

Australians who do not have adequate and tailored personal insurance are exposed to greater risks.

I like to think of personal insurance as an umbrella. An umbrella can’t stop the rain from falling, but it certainly can protect you in a storm.  In the same way, personal insurance cannot prevent life’s storms from happening, but if it is set up correctly it will make sure you and your family can survive if you can no longer work. It also means that you do not need to sell your business to cover living costs.

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There are some subjects people would rather avoid than address. One that can be fairly common amongst people is their own mortality.

Only 50% of Australian adults have a valid will. For some people it may be that they have not bothered to get around to doing one, others feel that they don’t have enough assets to warrant a will. A surprising amount of people though, and I have met many of them, don’t have a will because they believe that in doing a will they are tempting fate.

The statistics however speak for themselves: one out of one people will eventually die. For most people the time and manner of their death is a mystery, so we need to protect ourselves against the unexpected.

Here are two of the vital preparation measures we should make:

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Have a will

There is an old but true saying, “Where there is a will there is a relative”. I have seen relatives come out of hiding over the years when they get sniff of an inheritance. A properly prepared will can go a long way to ensure that your assets are disposed of to those of your choosing, not the courts or other people’s desires.

Where there are complications like previous marriages or complex business structures it is critical that you consult a well-qualified legal professional to get your affairs well prepared to avoid disputes after you have died. They can also advise tax effective structures that can be of benefit to those left behind.

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Life insurance

Here is a simple test to discover whether you need life insurance. If you have debts or dependants that will survive your death, then you need life insurance. Your dependants will no longer have the benefit of your income once you have died. Even if you have no dependants you do not want to leave debts behind for others to absorb.

A qualified insurance broker can analyse your circumstances and recommend how much insurance you should be carrying and how to best structure it. They can also research the insurance market to find you the best product at the best price.

Once you have these measures in place, make sure you tell at least one trustworthy person and share with them the details of both. For your life insurance, you should give your partner and another close family/friend the contact details of your insurance broker so that if the unthinkable happens, they are able to inform the broker so they can make a claim for you. If the broker or insurance provider is not informed, you actually risk not claiming what you are due.

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For your own peace of mind, and for those close to you, it is important to address these vital preparation steps for matters of life and death. They help improve the quality of life for those who will remain after your death, and that is an important responsibility.

If you have any questions about this, feel free to contact me or leave them in the comments section below.

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Rick Mapperson and Associates has been busy lately with magazines, newspapers and online information sites interviewing our Managing Director about business and insurance. Rick Mapperson has also had helpful articles published across Australia that we thought you would be interested in.

Hot off the press, in the July 2011 issue of Dynamic Business magazine on page 42 is an article written by Rick Mapperson for small business owners about protecting themselves and their businesses, including with personal insurances. Take a sneak peak here: Dynamic Business magazine_July 2011_Rick Mapperson

Also in Dynamic Business is Rick Mapperson’s weekly column, Business Shelter, where he talks about risk, personal insurance and business.

If you’re looking to save money and get some tips on managing your personal finances (who doesn’t!), you should take a look at Saving Money Expert where Rick regularly gives advice. You can read his latest articles on The Dangers of Being Under-insured and How to Know if You Are Being Sold or Ripped Off.

Finally, Rick Mapperson has recently been interviewed by the Sydney Morning Herald, The Age and the Brisbane Times.

Told you we’ve been busy! That’s why we have hired more staff to make sure we have time for new clients and more exciting Project Life work.

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A recent survey asked Australians what they would do if the unthinkable happened and they could not work due to sickness or injury:

• 40% said they would rely on assistance from the government
• 36% would rely on health cover
• 30% would rely on their personal savings.

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I thought I’d help clear up some of these misconceptions so that you can make sure you (and your family) are looked after in difficult circumstances.

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It is important to realise that sick pay, worker’s compensation or government support are not long-term or sufficient solutions in the event of illness or injury that prevent you from earning an income. You may get a limited amount of sick pay from your employer if you receive a salary, but it won’t last long. Workers’ compensation only covers you for a short time and is solely for work-related injuries – a small percentage of causes of disability.

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To calculate how much financial assistance you would need if you could not work due to sickness or injury, meet with a personal insurance broker and have a think about:

• your age, income, lifestyle goals and occupation
• ongoing expenses such as school fees and health cover
• your debts and the amount of money required to extinguish them
• cost of potential medical expenses
• the impact of not earning an income for a long period of time.

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I had a client who was recently claimed $150,000 from his income protection for being diagnosed with prostate cancer. His prognosis is excellent and he is expected to make a great recovery, but the money has meant that his can take time off from work and his family can comfortably live while is not receiving any income from his business. It has also bought him options with treatment and choice of doctor.

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It is certainly worth the small amount of time it takes to consider your options.

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You actually risk being under-insured by not getting a specialist broker to look at your individual situation. For example, if you are receiving multiple sources of income through investments, this could be overlooked.

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It is best to get an experienced broker to help you with choosing types of cover, sums insured and which company to insure with.

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Just like you do for many other important decisions, it is worthwhile talking to your friends for personal recommendations of a good personal insurance broker.

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The internet does not guarantee a good result and has a lot of misleading information about personal insurance.

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You should be looking for a broker who:

• is experienced
• is specialised in personal insurance
• is trustworthy and understanding (after all, you are asking them to help you take care of what is most dear to you – the your welfare and your family)
• offers personal service and is independent.

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Exercise your right to ask a broker as many questions as you like. Find out:

• How long have they been in business?
• What insurance companies do they deal with?
• Are they independent or are they licensed by a specific Life Insurance office?
• What are their fees?

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A good broker should first of all listen to your needs and will be clear in their recommendations, take care of the paperwork and any follow up requirements, and will review your policies on an annual basis at the very least.

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When looking to hire the services of a professional, how do you select the right professional for you?

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Over the years I have seen too many people pay a huge price to become successful in business and achieve financial prosperity.

Some have lost their marriages through neglect. Others have suffered permanent health issues through overwork or even premature death. I have had clients who have had to claim on their income protection when stress related medical conditions have hindered their ability to work.

There is no point making money if you have no time to enjoy it, no one to share it with, or no health to appreciate it.

I have found that running a small business can be challenging and isolated enough without adding imbalance to it.

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Money can be a great tool but it is a terrible master.

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• Money can buy amusement, but not happiness or joy.
• Money can buy a bed, but it cannot buy a good night’s sleep.
• Money can buy food, but not an appetite or a meal shared with friends.
• Money can buy medicine, but not health.
• Money can buy a house, but not a home.
• Money can buy companions, but not friends or loved ones.
• Money can buy flattery, but not respect.

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So consider work as just one segment of your life. It should not be your life.

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Remember that while work is important to enable you to earn a living, it is not your reason for living.

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Here are four things that you can do this week to improve your balance:

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• Set boundaries so that when you are home – you are home. Don’t bring work into your personal time. Make sure you close that chapter of your day when you are home and be really present when you are home or with friends and family.
• Get involved in something creative that uses parts of your brain that you don’t often use in your time at work. I set time aside to paint as I find it very stimulating yet calming (it is very different to personal insurance policies).
• Put your money to good use. One of the greatest things about money is that it can be used to enrich the lives of others.
  Through my business activities I have been blessed and honoured to be able to fund orphanages in India and The Philippines. Also I have been able to establish our very own home-grown charity Breakthrough Houses which is making a difference in the lives of many people right here in Sydney.
• Develop areas of interest that you can continue when you retire or work fewer hours.

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I’d love to hear from you. What do you do to help create balance in your life?

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