How To Do It: Vital aspects of financial planning

Even with the plethora of financial advisers in the Gulf, there are often two aspects of financial planning that are overlooked.

These are what happens either if one was to die suddenly or was incapacitated and unable to work.

The first is a certainty and planning what happens to one's estate when the final call comes should be carefully considered. The other is one that we hope will never happen but not many plan in case it does.

Just to make one think a little more on the subject, the Austra-lian Institute of Health and Welfare recently reported that there is a 50:50 chance of every working Australian being disabled for three months or more before they reach the age of 65.

Although the trend is for an increasing number of expatriates to plan to maximise their investment returns, not many appear too concerned on effectively distributing their wealth after they have parted this world.

The optimum plan would be to see that beneficiaries in one's will receive exactly what is expected and that the taxation aspect has been clearly considered and taken into account.

The will is the cornerstone of all estate planning and there are some aspects that should be mandatory. A list of all assets should be drawn up with precise details of who should get what.

Current wills should be checked and assurance made that it represents what needs to be done with the estate when one finally falls off one's perch.

The other question that should be asked is what plans have been made if one is unable to work. It is of little use if assets are not protected in such cases. The only answer would seem to be to implement some type of insurance scheme. Which type would depend on individual circumstances.

Disability income is a benefit paid as a result of losing income through the inability to work, either temporarily or permanently. Similarly, trauma insurance will provide for a lump sum that is paid on the diagnosis of some specified condition.

The one that is the most common is term life insurance, which pays an agreed sum on death or sometimes on diagnosis of a terminal illness. Not only is it important, some would consider it essential, especially for those who have long-term financial commitments or who have family relying on their income.

This benefit provides a lump sum that can be used to pay off expenses and mortgage repayments as well as to provide for future investment options along with maintaining a certain standard of lifestyle.

An increasing number of expatriates is taking out private health insurance cover. Depending on the specifications of the policy, this will cover, inter alia, varying amounts of the costs of being hospitalised in a private facility.

For those who run their own companies, the pros and cons of business cover should be weighed up. This can protect against workers' compensation, fire, theft, public liability, product liability, etc.

Insurance is an important aspect of any financial planning scenario. The only problem is that there are so many different providers out there that it is difficult to ascertain what is the best product under each individual's circumstances.

The usual advice applies: deal with only reputable companies and always check what is being charged.

Some of the providers have a reputation of high entry fees and ongoing administration charges for which, in the end, the consumer will inevitably foot the bill.