A concern for ventilators dominated COVID-19 daily briefings. You may have thought, “If I need one, will there be one for me?” In the early stages of the viral onslaught, there was talk of deciding who would a besieged doctor work to save and who would be allowed to die? If I’m a really sick senior citizen, and it’s me versus a younger person, would they choose to let me expire?
There now seems to be enough ventilators to go around, even a surplus in some areas. But hope you never need one. A significantly large number of patients whose lungs are so damaged and compromised to the point where they need machine assisted breathing, do not survive. Beyond that, for those who survive intubation, for some time after leaving the ICU, patients can experience a form of “post-traumatic stress disorder, Alzheimer’s-like cognitive deficits, depression, lost jobs, problems with daily activities such as bathing and eating.” (Washington Post, 4/3/20).
Overwhelmingly, tragic events cause us to think about our own mortality, our frailty, our dependence on things over which we have limited or no control. What would have happened to your family and other loved ones who depend on you had you died or been incapacitated for a long time or permanently? Anything that forces an unplanned business shutdown can have tragic consequences. An owner’s life work, livelihood and major investment, potentially destroyed. That impacts not only owners, but family, partners and key associates, all employees, creditors, vendors, landlords, a community.
In a Zoom conference session with Denise Logan, Scottsdale-based speaker, business consultant and author of “The Sellers Journey,” we discussed the emotional roadblocks that closely held business owners battle in trying to put a succession plan in place when thinking about retirement and monetizing their life’s work. They don’t like to think about what happens when they’re not there to run the company. They don’t like to think about “what’s next?” when they no longer have a business to occupy their time. What will provide meaning and purpose when every day is a “day off?”
Emotional barriers precipitate procrastination in many people, no matter what they do for a living when confronting the possibility of injury, illness, and incapacity, and the absolute certainty of death as the end point of life. Financial advisors know that trying to get someone to focus on living and testamentary estate planning, and succession planning for owners and key people, is about as popular as calling to schedule a root canal.
So how about focusing on the peace of mind that will ensue when you get your affairs in order, along with a monitoring and update plan to keep things current? How about the confidence you will feel in planning for the future and for building or rebuilding financial independence, knowing that if the old Hebrew expression, “Man plans, God laughs,” comes true and short-circuits plans, even if the worst happens, you’re dead, disabled, or your income is interrupted, your bases are covered? Those who depend on you are okay. Your employees are okay. Good to know!
Many people carry life insurance to indemnify persons they care about from the economic consequences of their death. But if you work for a living, how do you protect a reasonable portion of that income stream from the aftermath of incapacity? For the average 30- to 40-something breadwinner, the odds of disability that could last five to six years or more prior to retirement age are far higher than the odds of death. Long-term disability coverage is often overlooked, as is insurance to buy out incapacitated owners and key people in closely held businesses, business overhead coverage to protect the enterprise when an owner or key person is sidelined with a serious state of incapacity.
High earners may need supplemental protection above and beyond the limits of group short- or long-term disability plans. Many company plans will not replace sufficient income for those whose main reward is an ample bonus structure beyond basic salary. You insure your car and home. Why not insure a good percentage of your earned income?
COVID-19 prompts us to consider the downsides of “what if?” The virus isn’t healthy, but planning and preparation for “next time” is!
Lewis Walker, CFP®, is a financial life planning strategist at Capital Insight Group; 770-441-3553;firstname.lastname@example.org. Securities & advisory services offered through The Strategic Financial Alliance, Inc. (SFA). Lewis is a registered representative and investment adviser representative of SFA, otherwise unaffiliated with Capital Insight Group. He’s a Gallup Certified Clifton Strengths Coach and Certified Exit Planning Advisor.