Craig Nolly and Richard Toon - Abacus New Plymouth

Craig comes to us. He’s listened to our goals, our investment needs and our insurance needs & he’s sold us products that fit best to suit our lifestyle.
Louis & Barbara Kuriger

Craig has really looked after us, He’s gone and got the best deals. That’s his job.
Ross & Shelley Clark

Dealing with a specialist company like Abacus is vital. That relationship thing is absolutely important because you know someone is going to bat for you.
Steve Day, MD Pace Engineering

I am truly grateful to Jamie and consider myself extraordinarily fortunate to have received the benefit of his astute advice and assistance.
- J. F. Pickett

It has felt very good to know we have Richard and the team at Abacus Group Ltd on our side.
- Brian and Tracey Downes

Richard bent over backwards in his endeavours to help us every step of the way through the claim, making the process as simple as possible.
- John & Carole Lynskey

Holiday of a lifetime became a descent into hell

Abacus Values
Feb 3, 2014

Your Greatest Asset


Most people's lives can be divided into three distinct stages: your education, which extends all the way from your first day at kindergarten to the day you walk across the stage to receive your tertiary degree; your working career, in which you accumulate most of your wealth; and your retirement years. Each stage of your life cycle critically affects the subsequent stages, and each contains unique risks that need to be effectively managed. However, no matter what stage you're in, the most important asset you have is yourself: your human capital and your earning potential.

Life Stages

The education stage is a very important stage for everyone. The path we take at this stage in our lives will affect not only our future earnings, but also the person that we become. In terms of earnings, there is a significant amount of studies that have been done that show a strong correlation between the level of education and the amount you earn over your lifetime. Although this is an important stage in your life, the risks faced in this stage are less significant than ones you face in the next two stages.

After the education stage, you move on to the working years of your life. At this point, your debt level is usually high, but your potential to earn income is also high. This potential to generate earnings comes solely from your own abilities, and is what many people refer to as your human capital. As you move along in this stage, you slowly begin to convert your human capital into financial assets, and it is at this point in which your human capital is at its most vulnerable. If there is a sudden loss of this ability to generate income, you and your family can become exposed to significant risk of financial hardship.

After decades in the workforce and accumulating financial capital, you enter the last stage: retirement. At this stage, you start spending the money you've saved throughout your lifetime, and for the foreseeable future, your expenditures typically become greater than your income. Because no one can know when they are going to die, the biggest financial risk you face in this part of your life is that you outlive your financial assets.

The specific risks you face depend largely on the stage of the life-cycle you are in. The dominant risks faced during your life are getting critically ill, becoming disabled, or dying unexpectedly in the prime of your working life, and secondly, outliving your assets in your retirement years. Hedging these risks can give you and your family peace of mind.

Mortality Risk

When looking at ways to protect your assets, many people overlook their most important and productive asset: themselves. Many businesses, farm owners and professionals consider physical assets to be the most important items to insure against loss, since without them the business or household will cease to operate. But of equal or greater importance to the continuation of either a company, farm or ensuring that income is still flowing into a household is the ability of the owners or key income providers to continue to work at full capacity.

If you think about yourself in a context that includes both your financial assets and your future earning potential as an asset, and then re-assess the impact of something adverse happening to you, you'll quickly realise how at risk you actually are. Your disability, illness or worse, your mortality, would have a disastrous effect on the financial well-being of your family, especially if it occurs early in the working stage of your life.

Fortunately, from a financial perspective, the adverse effects of your death can be mitigated with a traditional life insurance policy. A life insurance policy will pay out a specified amount in a lump sum, and it is this characteristic that makes life insurance the perfect hedge to this risk. In the event you got critically ill (common illnesses including cancers, stroke, and heart attack to name a few) Trauma cover will also pay out a lump sum for you to use however you wish while you recover, for example covering your loss of income, or give you the capacity to perhaps pay off your mortgage, or however you wish or need to use it. Income protection on the other hand allows you to have your income covered if you are unable to work due to illness or accident. This ensures a regular income continues to flow in even though you are not working so you can pay your bills and live as per normal during recovery. In some cases if policies are set up right, one may have the ability to claim on both their Trauma cover and Income Protection at the same time.

The Bottom Line

Too many people fail to recognise the need to protect your biggest asset: you. By recognising this risk, you can consider hedging them easily with simple financial products. Having an annual review of your Life, Income Protection, Trauma or Critical Illness Cover, Permanent Disablement and Health cover is vital for any business owner, farmer or professional to stay properly insured against unexpected events.

To create your own contingency plan, contact us here

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    Aug 16, 2018
    Craig Nolly and Richard Toon are in Cuba, celebrating 30 years in business together and 20 years since they formed Abacus Group, an insurance advisory business. Their wives Caroline Nolly and Grazia Toon are with them. Then a catastrophe strikes Craig down and he nearly dies.
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    The provincial hospital in Matanzas where Craig had three emergency surgeries looked good from the outside, but standards, experience and facilities were extremely lacking.

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    PART THREE OF A SIX-PART SERIES

    Richard: “Remember virtually nobody could speak English and we had no Spanish. There was also an underlying culture we didn’t know about until later, that you just had to go along with the system. Being loud and pushy wouldn’t work, we just had to be very patient.