Last year I wrote the following article regarding one of our retired clients that had to dip into their savings to support family members.
We have been reminded of this situation with a similar event impacting on another client who is now preparing for retirement.
“Last week, one of our long standing clients who have recently retired, contacted me for further advice.
Their daughter has a serious illness which unfortunately will have long term impact on her health and ability to take care of herself and her children.
The daughter has health insurance only with no critical illness or life insurance. Their son-in-law has had to stop work to care for his wife so his income has been substantially reduced.
Consequently my clients are now using their own savings to help support the family including paying part of their mortgage so they do not lose their home.
Our clients who were quite comfortable with sufficient capital and income to enjoy their retirement lifestyle are now seeing their savings diminish as they are helping their children and grandchildren.
Transferring the risk to an insurance company or to the grandparents?
We all love our children, and families are there to provide support when it is most needed. However I strongly recommend that your adult children are actively encouraged to fully insure their income and lifestyle.
If the risk is not transferred to an insurance company with the payment of a premium, it may well be transferred to the grandparents in the event of serious illness or accident.
We are happy to provide advice to our clients adult children including free access to their own C3 file where they can review their budget, assets, liabilities and insurance.
Some of our retiree clients have chosen to pay the premiums on their children’s insurance rather than risk their own retirement savings.
If you would like to discuss this issue or arrange a review meeting, please contact our office.”