Buying a new farm is one of life’s most exciting milestones - falling in love with your ideal place, visiting for the first time once it’s yours, dreaming up plans to clean it up and make it shine. Or, maybe it is just seeing your children or grandchildren laughing and running around the place that puts the biggest smile on your dial!
Well, we all know that over time the magic starts to taper – the excitement dies down and inevitably the mundane reality starts niggling at our minds. And you guessed it, one of the least exciting elements of buying a new property is debt!
If you have laid awake at night worrying about debt, you are not alone.
Debt and agriculture go hand in hand, and current debt levels are greater than ever before. To put things into perspective, in 1965 The Reserve Bank of Australia reported rural debt was pushing $1.2 billion. As of 2016 it is estimated to be almost $70 billion. Wow, that’s a massive change in just 50 odd years!
In my experience, when worrying about debt, key questions running around your head like a drunken monkey include:
“What happens to my family if I (my husband/wife/partner) dies and the family is left with all this debt? How will the banks react? Will the bank need to sell them up? Will they be able to stay on the farm?”
We’ve all heard the horror stories; Dad passes away leaving Mum with the children, the farm and the debt - kids are pulled out of boarding school, farms are sold and all your family has worked so hard for is lost. A truly heartbreaking outcome, but one that can be easily avoided.
In fact, I am here to tell you that there is an incredibly simple solution to prevent this specific problem and it is as simple as buying some Insurance or more specifically Life Insurance.
You might well ask, “So Ben, if it is so simple why don’t more people have it in place?”. The reality is, no one likes talking about death and they generally hate talking about life insurance, let alone paying for it. However, when you think about it, life insurance is an incredibly simple solution to a massive problem, and by far the best way to keep your family protected - and help you sleep at night!
Now, before I sign off, if you are kicking back thinking, “Phew, I have a life insurance policy in place, Ben”, there are a few questions you need to consider.
1. Is there enough cover in place?
2. Will the policy actually pay out?
3. Is the policy so old it’s obsolete?
Life insurance is ultimately a contract between you and the insurance company, and as with any contract, the devil is in the detail. It’s crucial to seek advice from an expert adviser, to get the right policy, paid to the right people, at the right time.
So, if you have recently taken on debt, have debt or are just generally worried about debt, why not put the cover in place and give yourself one less thing to worry about.
Remember, if you can afford the debt, you can afford the life insurance.
I’m the Financial Bloke and I’m all about turning your Farming Success into Financial Freedom.
Cheers,
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