Real clients. Real stories. Real successes!
We have helped many of our clients save thousands of dollars, hours and headaches. Here are just five examples of how some of our clients have benefited from working with us.
Case History 1: One business; multiple business partners.
About 15 years ago one of our clients started a new business with a partner. We helped identify the need to fund a buyout between the partners and fund losses the business would experience if one of the partners died. We also helped them understand what could happen to them and/or their employees if someone became unable to perform the duties of their job, or a member of anyone’s family became ill and had huge medical expenses.
All of these things were covered with business, personal and group employee benefit policies which were updated and maintained throughout the years.
Eventually there was a claim. One of the founders got seriously ill and all aspects of the coverage we put in place came into play. His expensive drugs were covered by the group benefits plan for many years. When he could no longer perform the majority of his occupational duties we claimed against the group disability plan. When he died his wife was the beneficiary of personal insurance and his partner received capital from business insurance which was used to fund the purchase of the deceased’s shares and to support the business in the absence of a key principal.
Our intimate knowledge of how all the pieces fit together enabled us to provide valuable advice and expertise which helped a very difficult situation resolve itself in the best way possible.
We delivered cheques which helped protect the owner’s family, the succeeding owner’s family, the business, the employees and their families. It was a totally integrated process.
Case History 2: Employee benefits that really support employees.
John and his partners enjoyed tremendous employee loyalty over the years and as a result we have come to know them as well. This enabled us to understand their needs and individual life situations. About 5 years ago, we did some personal planning for one of the employees. We reviewed their needs for coverage if she or her husband died, or became disabled or ill. Personal life, disability and critical illness insurance were put in place in addition to the benefits provided by the group benefits plan the employer and we had implemented.
In the course of a review of their situation it came out that the husband had had a heart attack a couple of months before our meeting. This is one of the primary illnesses covered by critical illness contracts and fortunately we had put one in place. Without ‘connecting the dots’ between the employee benefits package and the individual needs of each employee, this never would have happened. The claim was paid successfully and the family is delighted.
Case History 3: What to do with a windfall.
The payout on an insurance claim can lead to a windfall that raises the same kinds of questions as what to do with a windfall lottery win. This is exactly what happened with one client. Knowing how such a windfall can affect a family now and into the future, we arranged a teleconference with the client to discuss how the funds might be used in the context of their current and potential future situation. We talked about paying off the mortgage, funding the kid’s education, putting money into Registered Retirement Savings Plans and Pension Plans, reducing debt, having some fun on a vacation, and renovating their house. It did not take long to over-allocate $100,000. The key thing was to think about everything and make sure that this windfall did what it was designed to do — put the family in a better financial position if someone had a serious illness and lost some of their capacity to support the family.
We talked about how all the various uses for the funds integrated with each other, how they might be prioritized and what could happen down the road. Very few of us receive an unexpected lump sum of cash in our lives and as such we owe it to ourselves to make some of it last as well as have some fun with it today. Every family is different, but if all aspects of the situation are considered very good decisions can be made.
Our close relationship with the employer helped an employee with her personal situation. The planning we did 5 years ago and today has been fully in the context of what she and her husband have in terms of personal assets, group benefits, RRSP’s, etc.
Case History 4: Huge growth. Big risks. Even bigger rewards.
We were introduced to a firm which had been experiencing huge growth. It became clear early in the discussions that none of their advisors was looking at their situation from multiple viewpoints. They did not know what they had in the way of personal insurance and the group insurance had some significant holes in it.
The focus of the first meeting was to identify risks; quantifying them would come later. Typical of many entrepreneurs, the partners’ personal assets and debts were mixed up with their business assets and debts, and, unknowingly, they had put several aspects of their personal lives at risk. For this reason, the risks had to simultaneously be put in the context of business, personal and employees.
Further, each partner’s situation was different, as is typical in many entrepreneurial business. Each partner had a different tolerance level for dramatic changes, so the impact of the risks identified differed greatly from one partner to the other, depending on their personal situation and how things were set up with their spouses and children, as well as their ages and health.
Our key objectives were to:
- Remove some of the major risks using inexpensive group benefits.
- Ensure the continuation of the business, or at least an orderly sale, in the event of total disability or death of one of the partners.
- Quantify employee risks to determine if the employer should provide coverage to mitigate their moral responsibilities and/or improve their competitiveness as an employer.
- Ensure that the bank and other creditors do not breathe down the neck of the partners who will be left after someone goes on disability and/or dies.
Prior to working with us, the company had several advisors. We were surprised to learn that not one of them had ever asked the key questions to assess their exposure to risk. Determining their philosophy as to how to manage risk was another discussion altogether and needed to be developed over time.
Together, we reviewed specific issues such as:
- Paying their share of expenses to run the business if they are unable to work
- Funding the corporate line of credit if a partner gets disabled and/or dies
- Paying off a mortgage for the building in which their business is housed
- Paying capital gains tax on the office building
- Funding a shareholder buyout
- If the firm must be wound up because the partnership does not survive, how do they fund their obligations to their employees?
- Funding their personal incomes in the event of disability or a serious illness
- Replacing personal family income if the partner dies
- Replacing personal family income if an employee dies
- Funding to replace lost sales when a partner dies or becomes disabled and his key clients leave to go to another firm where they have a relationship with someone else
- Funding personal mortgages, lines of credit and other debt
- Need for insurance on spouses
- Integrating group health and dental care between spouses.
As a result of our management briefings, a comprehensive plan was put in place that achieved the company’s objectives, and they were able to focus on continuing to build the business with greater confidence and peace of mind.
Case History 5: Loss of a key employee.
There is an old saying in our business that no one ever dies at the right time. Sadly, one of our client’s key employees became disabled and later died. Over the years we had assessed the risk to the company if any of their key people became disabled or died, and had kept increasing their coverage as the business grew.
This key employee became disabled and died not only when the economy tanked, but when their industry experienced a huge change in terms of ownership of suppliers which affected the products they sold. For the first time in their history, they lost money.
The bank cut their line of credit in half without any notice and then proceeded to give them a very hard time daily about how they did business, making unreasonable demands on them. Other staff had to take over from the senior person, but no one really knew how to do what she did because she had been in charge of that area of the business for so many years. It took a year for them to even figure out all the things she did day to day.
Her shares had to be purchased and her shareholder loans had to be repaid, all at a time when business was very poor. Her group disability insurance replaced a large part of her income and allowed the Company to stop paying her salary while she was disabled. The group Health Care plan paid huge claims for drugs for a number of years. The claims were in a range that could easily bankrupt an employee. Personal and group life insurance paid taxes in her estate and helped fund a trust for her children.
Corporate business life insurance paid off her shareholder loans, paid her estate for her shares, paid off the bank, and left the company with a lump sum in their bank account which effectively now works like a line of credit so they seldom have to touch the bank line of credit.
Because of the close relationship we had with this client, and the foresight of the client to work with us in identifying and quantifying the risks throughout the years, both the business and the employee’s family were not financially affected. As a result, the business survived, successor owners were found, all of her employees still have jobs and their families have benefits. The business has been restructured and new key employees have been recruited. Her family has no debt and can go forward with a secure future.
We encourage you to try our self-assessment tool.
Then, give us a call to discuss how we can help!