WA AMP financial planner Paul Carter had long ago put in place a comprehensive buy sell agreement along with keyperson protection based around insurances for his clients company.

In 2011 the clients did a large cost assessment and were looking to make the business more efficient and to reduce costs.

One of the partners had reached 63 years of age and the premiums associated with that age had more than doubled in the 12 years that it had been in place.

“The clients thought the insurance had served its purpose and they were looking to reduce or end it,” says Paul.

Before cancelling the policies though, the adviser suggested that each of the four directors should know the entire story of their position and recommended they all have detailed medical examinations.

“It is the only sensible thing to do before getting rid of, or even reducing, any type of insurance which can never be bought again at that age, or is so expensive or seriously restricted that its value may be questionable,” he says.

The result of the medical for one of the directors was profound. It revealed an undiagnosed, untreatable terminal illness.

“The doctors found that my client had a cognitive disorder that is degenerative so eventually he will be unable to look after himself in the most basic way. It was a terrible diagnosis,” says Paul.

Known as Corticobasal, the condition is as rare as it is appalling. It is a progressive neurodegenerative disorder that involves the cerebral cortex and symptoms include movement and cognitive dysfunction similar to Parkinson’s disease. It is terminal because other illnesses such as Pneumonia step in and become the cause of death. Treating this condition often intensifies the symptoms while not improving outcome in any way.

“When the diagnoses became known my client was immediately in a position to make a claim. We entered into that process and are currently organising a keyperson payment to the company,” says Paul.

The keyperson insurance will cover the loss of income from having a director suddenly extracted from the business as well as the cost of replacing him. The payment will also assist the exiting director as a payout.

“That money is helping the client and his family while protecting the business, which has lost a man with amazing abilities and historical knowledge,” says Paul.

The buy sell, which is the larger of the two insurances, will see about $2.1 million change hands to the exiting director and his family.

“The company does not need to go into debt and borrow money from the bank to come up with this payout. Banks are very tight in their lending practices at the moment and such a debt could well have had a negative affect on the business,” says the Nedlands-based planner of 25 years’ experience.

The thoughtful and well considered advice from Mr Carter has allowed his client to manage his affairs long before this degenerative disease takes over. Mr Carter has also helped set up the financial plan for the next generation of this client.

“I’m just doing my job while this poor man has to deal with a terrible illness. I feel very relieved when I know that they do not have a massive financial burden to worry them.

“We negotiate with insurance companies and are really very lucky to be in such a trusted position to make things happen at a time when your client seriously needs help,” he says.

Mr Carters firm – Provident Financial Services – has a vision to “Plan, Help, Achieve”

“This is a time when our vision really has happened.“

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