The Rural Voice, 1989-08, Page 18Would you
like to discuss
income replacement?
PROFESSIONAL INSURANCE
REPRESENTATIVES
WATKINS, DAUGHERTY
& ASSOCIATES
LICENSED INTERMEDIARIES
FOR
sus
IMPERIAL UFE
Estate Planning, Business
Insurance, Group Benefits,
RRSPs, RRIFs, Annuities,
Disability Insurance,
Retirement Planning,
Equity Funds
The Imperial Life Assurance Company
of Canada
305 King Street West, Suite 609
Kitchener, Ontario N2G 1 B9
LUCKNOW:
LISTOWEL:
KITCHENER:
528-3514
291-5040
799-5281
AGRICULTURAL
EMPLOYMENT
SERVICES
Provide employment planning
assistance to the agricultural
industry
Recruit workers for agricultural
employment
Assist worker orientation and
transportation
Promote good employment
standards
Provide information about
government employment
programs
OWEN SOUND WALKERTON
371-9522 881-3671
16 THE RURAL VOICE
WISE MOVES
Financial Strategies for Farmers
Bob Watkins
This month The Rural Voice introduces "Wise
Moves," a series of articles provided by Wat-
kins, Daugherty & Associates. Taking as acase
study the farm of "Martin Wise," financial
experts Richard Daugherty and Bob Watkins
will be outlining various ways that farmers can
enhance their financial security and planning.
Your questions and comments are wel-
come: telephone Bob in Lucknow 528-3514,
Richard in Listowel 291-5040, or Kitchener
(Imperial Life head office) 744-5281.0
INCOME REPLACEMENT
My name is Martin Wise. I run a
mixed operation of 150 acres, helped
by my wife Mary and our two chil-
dren, Bradley and Cynthia.
A month ago, I had an accident
with my tractor. The result was a
badly bruised leg, but it could have
been worse. It started me thinking. If
I had lost that leg and become perma-
nently disabled, I would have had to
make some choices about the future of
my farming operation. My thinking
went something like this:
First of all, I would need some help
with the livestock, the planting and
harvesting of my crops, and the farm
maintenance. I am sure Mary could
not manage all the heavy work on her
own. The trouble is, where would I
get the money to pay for the extra
help? Well, I could always sell some
livestock, provided they were ready
for market or the prices weren't down.
On the other hand, Mary could take an
extra job off the farm. That would
probably provide enough to replace
the lost family income, but not enough
to pay for hired help as well.
If we got into deeper financial
difficulty, I could ask the bank to
extend my line of credit. But I doubt
if that new loans officer would let me
have any more credit under those
circumstances.
As a last resort, I could sell the
farm — not a very satisfactory
solution!
Actually, what I decided to do
was set up an income replacement
Richard Daugherty
program. I didn't know whether, as a
farmer, I could qualify for this type of
program, so I called an insurance
representative. I sat down with Mary
and the representative to discuss the
following questions: (a) How long
could we survive without income
replacement? (b) How much income
would we need each month? (c) How
long would we like the benefit to last?
We were able to design a program that
will provide us with a regular monthly
cheque if I should be disabled.
I was initially concerned that,
because I was paying myself only
$15,000 a year out of the $40,000
annual profit, I would not be able to
replace the total lost farm revenue.
But my program covers that too. This
means there are enough funds avail-
able in my program to replace the
family income, and pay for hired help
if I need it.
If I had been a sole proprietor of
my farm, I would have had to pay for
this program out of my own pocket.
In my case, because I have incorpo-
rated my farming business, I can pay
for this program through the business
and the expense is a tax deduction.
By the way, in case you think this
could never happen to you, our repre-
sentative told us that 48 per cent of all
mortgage foreclosures are a result of
disability.0
Richard Daugherty and Bob Watkins
entered the investment and insurance
business with Imperial Life in 1986.