Planning and preparation key for dairy farmers to protect their assets
Growing up in rural Southland and a 25-year career as a financial adviser makes Jena McKenzie highly qualified to recommend an insurance plan to protect a dairy farmer’s businesses, lifestyle and family.
There’s something about the dairy farming industry that helps make Jena McKenzie tick, and it’s for that reason she has focused most her time and experience on helping dairy farmers protect their assets.
“I’ve always had an affinity with the dairy industry – the hard work, the passion, the land, the animals, the positive attitudes and the supportive network of sharing knowledge among peers – that’s what makes it one of New Zealand’s most vital industries.
“I also have a great appreciation for the role that women play within the industry and how they have truly equal footing within their respective businesses. Daily, they make a massive contribution to the industry. I have a huge amount of respect for their work,” Jena says.
Women are often overlooked when it comes to the first insurance aspect Jena recommends – key person cover.
Farms keep control with key person cover
In the event of death, disability or major illness, the business must be prepared and insured suitably so that the cash flow and business processes are sustainable.
I’ve always had an affinity with the dairy industry – the hard work, the passion, the land, the animals, the positive attitudes and the supportive network of sharing knowledge among peers – that’s what makes it one of New Zealand’s most vital industries.
“It’s about creating a plan that goes beyond finances and assures staff and business processes,” Jena says. “What the key person insurance can provide is financial certainty; if something did happen, the business owner or relevant party remains in control, certain of the business future and has the necessary cash flow, through agreed value contracts, to carry on irrespective of any, if at all, Accident Compensation Corporation (ACC) pay-outs.
“Because I know the industry so well, I’ll also recommend owners find and secure contingency plans like backup milkers and other crisis management details, and recommend providers for Wills, Legal Advice, Powers of Attorney and Estate Planning. I love looking after my clients and getting them to think about what protection they need.”
Jena recalls a recent client – a woman who jointly operated a farm with her partner – who was taken ill and unable to work, but the business was protected by the insurance. The cover replaced her loss of income for the entire year.
It’s about ensuring the business can survive while the Estate or family make a decision and are put in a position where they can ‘breathe’ and make sure the farm is financially sustainable... it’s not always a good time to sell.
Debt protection guarantees families still have choices
Protecting assets also includes debt protection in the event of death. Debt protection insurance preserves the farm and its assets, and means that the family or individuals left with the farm do not have to sell the farm if they don’t want to or need time to consider options.
“It’s about ensuring the business can survive while the Estate or family make a decision and are put in a position where they can ‘breathe’ and make sure the farm is financially sustainable. This is particularly important as it’s not always a good time to sell,” Jena advises.
In most cases, she adds, it’s the small and medium-size dairy farms that are most at risk or exposed as they can be single owner-operators or two-person companies that have no backup.
Accessing the best medical treatment and recovery and immunotherapy drugs (not funded by our pharmac)
Medical and health insurance can go a long way to protecting you and giving you the best health outcome. Of huge interest currently is the success of treatments with immunotherapy drugs especially where cancer is concerned. Many of these are not funded by pharmac or your medical insurer, unless you have some of the newer plans which have recognised how important it is to have access to these drugs. You just need to look at the 'Give A Little' pages to see how many are set up to help fund life saving drugs not funded by our government through pharmac.
Jena is currently on a journey with a friend who has stage four lung cancer who has had her life expectancy extended through use of the immunotherapy drug Pembrolizumab.
"She has gone from being told she would not see the birth of her first grandchild - to soon be welcoming her second grandchild into the world."
The faster the treatment and recovery is received, the more sustainable long-term health and happiness is, as well as the financial security of the farm.
"Ultimately, going private is often better at ensuring a speedier recovery and less stress and more options."
A full-service insurance plan always suits your circumstances
Aside from putting the right insurance in place, it’s the full service you get from an adviser that’s really beneficial, which includes plan updates, reviews and follow-through with claims. Jena is also motivated to offer level premiums that focus on long-term cover and affordability.
“The plan must always be relevant to changes in situations and based on measurable finances,” she says.
Jena McKenzie is a registered financial adviser with Lifetime Insurance and Financial Advisers. Jena splits her time between Christchurch and Golden Bay’s Takaka, where her daughter Tyler Langford is a dairy farmer, and services farming clients throughout the South Island.
Disclaimer: This article has been prepared for the purpose of providing general information, without taking into consideration any particular investor’s objectives, financial situation or needs. Any opinions contained in it are held by the author as at the report date and are subject to change without notice.