Money matters: Keyman Insurance
Graham Macdonald
MBMG International Ltd.
With more and more foreign investment arriving,
seemingly by the day, it naturally follows that there will be a large
influx of new managers – both local and expat. One of the things that
many companies forget when they set up a new operation is how valuable the
senior people are to the success or failure of the new operation.
Recently, a managing director of a trading company here
on the Eastern Seaboard extended a business loan for a new venture. As the
main ‘face’ of the company, he travelled extensively all around South
East Asia developing his network of contacts for the various projects he
was trying to promote.
After some initial disappointments the company began to
do well; it was growing rapidly and, for the first time, started to make
significant profits. In fact, the MD had recently persuaded his fellow
directors and shareholders to reject the offer of a merger with a large
international group. This was because he saw his firm as his passport to
eventual financial freedom as he believed that when he did come to sell
his shares the company would be a lot larger, well recognised and more
profitable. Thus, he would be able to fund his retirement.
Two months ago he was diagnosed as having inoperable
cancer and given six months to live. Although he had taken care of the
personal side of things by insuring against his personal liabilities,
mortgages and his children’s educational costs he had done nothing to
protect his company nor had his partners and shareholders. In other words,
there had been no Company Keyman Insurance taken out. Also, there was no
share purchase partnership cover.
The remaining shareholders and senior personnel then
struggled to raise sufficient capital to cover the company’s vastly
increased commitments, especially the instalments on the new loan. They
also had problems hanging onto orders, clients and staff – all of whom
were concerned about the company’s future without its driving force. As
well as this, they had to find the funds to pay for the right person to
take over as managing director and maintain, nurture and develop the
contacts made by his/her predecessor. Eventually, the cost and impact on
the cash-flow proved too great and the company folded. However, it would
not have done had adequate provisions been made. The cost of good advice
on setting up a company, maintaining suitable documentation and taking
advantage of the appropriate shareholding structures is insignificant
compared to the potential costs of not doing so.
Surprisingly, the cost of Keyman Insurance cover is far
less than one may think and could save a bad situation from getting worse.
Every company has at least one key person whose death
or disability would have a serious affect on the company’s future or, at
least, profit margins. A business owner or sales director may have
valuable contacts that, together with the business they provide, could be
lost in the event of his/her death. A key technical person such as a
research scientist may be vital to the development of a new product. The
aforementioned are just a couple of the numerous examples that one could
proffer.
As stated above, companies that suffer the loss of a
key person will also incur the cost of finding and training a successor.
Loss of business may seriously affect cash flow as the company’s
overheads, salaries, etc., still need to be paid. When all the facts are
considered then case for insuring key personnel becomes crystal clear.
Traditionally, Key Person Insurance has only been taken
up by companies in the USA and Western Europe. Businesses throughout the
rest of the world seem reluctant to follow this example thus leaving
themselves exposed to a huge potential and considerable risk.
It was ironic therefore that a client came to see me
recently and asked what had to be done to protect his business if
something happened to the senior personnel. After finding out what was
required our client looked at Life and TPD (Total Permanent Disability)
cover for himself and the other senior director of the company. The
insurance was for USD800,000 and USD 400,000 respectively. This would cost
the company a total of just over USD3,600 per annum for the two of them on
a Whole of Life basis and, if there were no problems, would result in a
maturity value payable either to the company or director upon the
retirement of the key individual.
As an SME, the company in question pays tax at 20%, so
the real cost of the cover was in fact only just over USD2,900 per annum
as it is claimable. They are also considering Term Cover as well that
would provide protection against a range of critical illnesses as well as
giving the option of income protection. This was more expensive at a total
of USD5,025 per annum. After a 20% deduction the net cost will only be
USD4,020 per annum.
All the client has to do is pass a straightforward
series of medical tests – which the insurance company pays for in full.
The case for Keyman cover has been so compelling that some companies
including Nestle, Proctor & Gamble and Wal-Mart have chosen to insure
every single one of their employees in their home countries.
The above data and research was compiled from sources believed to be
reliable. However, neither MBMG International Ltd nor its officers can
accept any liability for any errors or omissions in the above article nor
bear any responsibility for any losses achieved as a result of any actions
taken or not taken as a consequence of reading the above article. For more
information please contact Graham Macdonald on [email protected]
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Snap Shots: The Man on the Moon controversy
by Harry Flashman
If you are into old, historical cameras, there’s
twelve I know of that you can pick up for free! The cameras are
Hasselblads, and were commissioned by the US government, and typical of
the wasteful throw-away society of today, they just left them when
they’d finished. Discarded like an empty Coke can.
There’s
only one catch, these Hasselblads were left on the moon! However, with the
advent of space travel being just around the corner, someone is going to
get themselves a bargain, so it may as well be you. And don’t think that
you’re too old for the trip, as the Americans successfully sent John
Glenn up into space again at the ripe old age of 77 years. And brought him
back again!
They took the cameras up into space, much the same as
we take them on family picnics. The concept was to record what life was
like for our early space travelers and in fact some of these images were
artistically so good that they became a photography exhibition that toured
the world in 1984.
The cameras they used on the space missions were
closely related to the motor driven Hasselblad ELM, and were actually made
by the Hasselblad Company in their research facility in Gothenburg. By the
way, I do not follow the lunacy (nice word when we are talking about moon
landings) that the Americans faked the whole thing, and it was shot in the
Nevada desert. Nor do I believe that Bill Gates is going to send me $500
for sending emails to one thousand people, or similar hair-brained claims.
When NASA began to look at the logistics involved in
the moon landings, and the fact that they would like a photo or two for
posterity, they began to design their own ‘moon’ camera, which began
to look like a Hasselblad ELM. Rather than totally reinvent the wheel,
Hasselblad was contacted and the Hasselblad engineers began modifying
ELM’s to be suitable for a walk in space, and on the moon.
At the camera factory in Gothenburg a design and
research group was set up solely to modify and develop cameras for NASA.
At its peak, six people were employed full time to work for NASA and its
requirements.
While the camera looks very similar to an ELM of 35
years ago, many features in the ELM were dispensed with, to simplify the
use in the weightlessness of the moon’s atmosphere, and the fact that
the astronauts would be wearing bulky suits with built-in gloves, so small
‘fiddly’ controls were out of the question.
Mechanical modifications were also made. The mirror and
secondary shutter were removed and the focusing screen for the reflex
viewfinder was replaced with an opaque plate. Certain shutter functions
were unnecessary because the lens would remain stopped down between shots.
As a result the mechanism that opened the shutter on cocking could also be
removed.
The specifications for the moon camera were finally
settled in September 1968. The removable back system used by Hasselblad
was retained, and Kodak was commissioned to produce extremely thin film,
so that around 200 shots could be recorded on one roll in the camera back.
A completely new lens was designed by Carl Zeiss. This
lens would have a maximum aperture of f/5.6 and a focal length of 60 mm.
At that stage it was unknown what would happen to the optical
characteristics of a lens, operating in a vacuum, and much testing ensued
on earth first! Naturally it had to exhibit minimal radial and tangential
distortion. These were to be scientific cameras, remember, not just
“Here we are on the moon” cameras.
The design was not complete until February 1969, and
the finished cameras for the Apollo 11 space mission were delivered by
Hasselblad on 1 March 1969, six months after the specifications were
detailed.
The astronauts practiced with the cameras on earth (which perhaps gave
the notion of the conspiracy theory), because there was no focusing
screen, and they had to become adept at literally “pointing and
shooting”, there being no way that they could ‘frame up’ the
pictures either. That they got so many good photographs is quite
remarkable.
Modern Medicine: Psoriasis - a sorry sight for many
by Dr. Iain Corness, ConsultantA
very unattractive skin condition exists called Psoriasis (pronounced
“Sawryasis”). It is much more common than you would imagine, as many of
those afflicted with this condition hide away from the public gaze, keeping
their skin condition hidden.
Psoriasis affects more than 4.5 million people in the
United States alone. Patients with psoriasis are often frustrated because
the condition can be both physically and emotionally challenging. In
addition, if the skin problem were not enough to contend with, around 25
percent of patients, mostly between the ages of 30 and 50 years old, may
develop psoriatic arthritis. It also runs in families. For those who have
one parent with it, each child has a 25 percent chance of developing
psoriasis, and if both parents have it the risk goes as high as 50 percent.
Characterized by thick, red, white or scaly patches on
the skin’s surface, this chronic skin condition is caused by the unusually
rapid growth of skin cells due to faulty signals from the body’s immune
system. The extra cells build up on the skin’s surface and form plaques -
usually around the knees, elbows, scalp, hands, feet or lower back - causing
itching and severe discomfort.
The effects of this disease have been studied by
psychologists as it comes under the “psycho-social” umbrella, and young
people under 35 years of age are particularly adversely affected. Can you
imagine not being able to go to the beach or a public swimming pool with
friends because you would feel people were staring at you, or thinking that
you were “unclean”? This leads to difficulties in the workplace,
socializing and probably even more importantly, in sexual relationships.
Imagine a skin disease which has such an effect on your everyday life and
ability to enjoy it.
Currently, there is no cure for psoriasis. However, there
are many treatment options that can clear psoriasis for a period of time.
Each treatment has advantages and disadvantages, and what works for one
patient may not be effective for another. It requires skin specialists to
confirm the diagnosis, and to work out the best treatment options that are
available.
The actual treatments are many and varied, but the type
of treatment really depends upon the type of psoriasis, how widespread it is
and how resistant it is, so it is impossible to generalize too much. For
some sufferers there is a “trigger” and this can be such diverse
happenings as a streptococcal sore throat while some anti-malarials and
anti-hypertensives can also produce psoriasis as an unwanted side effect.
The types of treatment generally fall into three
categories:
Topical (applied to the skin) - Mild to moderate
psoriasis.
Phototherapy (light, usually ultraviolet, applied to the
skin) - Moderate to severe psoriasis.
Systemic (taken orally or by injection or infusion) -
Moderate, severe or disabling psoriasis.
While each of these therapies is effective, there are
also drawbacks. Some topicals are messy and may stain clothing and skin.
Phototherapy can require two to five weekly visits to the dermatologist for
several weeks. Many of the systemic medications can also have serious side
effects and must be combined or rotated with other therapies to maximize
effectiveness and minimize side effects. Research is ongoing, to find
therapies that provide safe, effective, easy-to-use treatment options that
provide long-term relief.
For the psoriasis sufferer, the message this week is not
to hide in the cave, but to come out and seek treatment again. As there are
so many treatments, one will work for you and should give the psoriasis
sufferer some hope, and like most medical problems, a positive outlook gives
a positive response.
Learn to Live to Learn: Reports
with Andrew Watson
This is the time of year that traditionally, teachers
despise and some students dread. In the wake of examinations, whilst the
clear blue water of the vacation is in sight but not yet in reach, there
is the onerous task of marking, followed by report writing.
If you can tell a great deal about someone from their
library (or lack of it) or perhaps by the contents of their fridge, you
can tell a great deal about a school by the quality of their student
reports. At the end of the school year, when tempers can be frayed and
fuses short, it takes a great deal of professionalism to summon the
energy to write sometimes hundreds of reports (my record is 327) which
do credit to the student, parent and teacher.
Just as there exists an apparently infinite number of
types of school, so there is an extraordinary range of reporting styles.
But, what should a parent and student look for in such a document and
what, I would like to conjecture, should teachers be expected to write?
I think presentation makes an enormous difference.
From a school’s point of view, a report amounts to a prospectus. It is
that important. Professionally bound, well-written, coherent documents
on high quality paper, provide parents with reassurance even before they
have read its contents.
Equally, loose, irregularly assorted pieces of small
paper with evidence of correction fluid and photocopying, betray a
reporting system beset by a culture of taking short cuts.
Then there is the quality of the writing. How
demeaning it must be for a fee payer to read a series of generic
comments, bereft of any acknowledgement of the person within the
student. Surely, you are paying, at the very least, for a personal
response?
Of course, many teachers who pluck generic comments
from a database resent the very idea of spending what amounts to a
considerable amount of time thinking about “little Issy” who might
very well have been a veritable pain in the neck all year. They will
reject the suggestion that professionalism demands a personal touch, on
the grounds that writing reports of this nature eats into their weekends
and evenings
Actually, in the past, I have overheard (hilariously)
resentment at having to use their “free periods” for report writing
(too much personal admin to attend to, I suppose?). When else do you
think you’re going to do it?
As for me, I cannot write generic comments. I find it
anathema. When I sit down to write reports, I think about two things.
Firstly, I think deeply about the student. Secondly, I think about the
parents/guardians and what they will think and feel when they read what
I have written.
In being critical, compassionate and honest, I
believe that I am imbuing the report with the integrity that such an
important document deserves. The amount of time it takes me to write
them is not a factor. Indeed, a stack of reports represents an
opportunity to manage time well.
Looking at the big picture, an international school
teacher is required to work something in the region of 180 days a year.
On this basis, I see every reason why a teacher should commit themselves
to evenings and weekends on the small number of occasions that it
becomes necessary. Call it vocational; call it a professional calling,
but I say, “Let’s just do a great job on this”.
I heard of one school, which encouraged the use of
generic comments, damned expressive language and ridiculed the use of
any “long words” whilst simultaneously discouraging staff from
writing ‘too much’.
When I have reorganized and upgraded report systems,
I have done the opposite. Give the teacher a chance to express
themselves! Let their personalities shine through! I think it is
terribly patronizing and ignorant to assume that your readers won’t
understand what you have written. After all, we are in the business of
education so let’s Learn to Live to Learn!
I would advise parents to inquire after the school
reporting system, its presentation, its regularity and its detail. You
can ask to see an examplar. Can you tell from reading the report what
your child has studied at school during the year? It would seem bizarre
not to include such obvious information.
In overhauling one reporting system, the first thing
I included that had previously been absent was the IBO Mission
statement. That seemed a pretty obvious thing to do, actually,
considering the Mission statement was supposed to be at the centre of
all the teaching! You’ll learn a lot just from the cover.
In my best experiences of schools, teachers have
actually enjoyed reading each other’s comments, in an almost festive
celebration of the end of the school year. It’s a huge team effort,
but an essential one.
Here’s an anecdote to end: my mother (bless her)
once came to a parent’s evening following an annual reporting session,
to find out why I had not received an Art report (I was taking ‘A’
level Art). When she approached my teacher, a wonderfully kind, queeny
old boy from Camberwell, he saw her coming, “Good evening, Dr Watson.
How wonderful to see you! What can I do for you?” My mother never had
any reason to enjoy this kind of evening and this experience was to
prove no exception. “I’d like to know how Andrew is getting on at
Art. He didn’t receive a report”. The old boy didn’t bat an eyelid
and replied quite innocently, “Oh, he’s doing Art, is he?” For
students out there fearing the worst, don’t worry. I’ve been there.
[email protected]
Next week: Holidays!
Heart to Heart with Hillary
Dear Hillary,
My regular partners clean their teeth, shower and then hop into bed, but
not this one. She takes ages under the shower washing off the last
traces of perspiration left over from her strenuous chrome pole dancing
activities. After towelling herself dry, she commences her moisturising
routine.
First, she combs a thick liquid mousse into her waist length hair,
massaging it into each strand with her fingertips. Then she applies a
generous layer of heavy night cream to her face, throat and neck. This
is followed by an application of baby oil that she slops all over her
body. Next her fingers and toes are smeared with a large dollop of
green, gooey grease, her lips are then smothered in vaseline and finally
she applies a rich, oily eye cream. She then literally slides into bed.
She is so greasy I’m surprised that her freckles haven’t slipped
off.
Should I tell her that I don’t like sleeping next to a soggy sponge
or, should I just hang her out to drip dry?
Mighty Mouse
Dear Mighty Mouse,
Have you no shame, Petal? Running around with all these women! It was
the road sweeper last week and some other poor hopeful the week before
that. Where did this slippery siren come from? From one of the chrome
pole palaces it seems, complete with the entire contents of the local
beauty salon. However, it appears that once again I have to save the
show for you. What I suggest is that you help with the baby oiling and
green greasing and see where it goes from there, and other than the fact
that you will end up with greasy paws, you could score quite well, and
the oil should stop your squeaking.
Dear Hillary,
I caught my boss’s wife out with some of her friends at a boys club
bar. They were drinking and having a great time it seemed. I am kicking
myself that I didn’t take some photographs, but do you think I should
tell her husband, my boss, about this even without the hard evidence?
The Detective
Dear Detective,
It sounds to me more like you are a blackmailer, rather than a
detective, my Petal. A few questions from Hillary first: to begin with,
why were you there at the boy’s club? Are you hiding something too? If
you enjoy your job, and the monthly salary, I would forget about being
Vinnie Calvino or Mickey Spillane, and just remember that you saw
nothing, that’s a good boy!
Dear Hillary,
I was standing at the urinal in a hotel the other evening, and looked
over and saw a very important Thai person at the urinal alongside mine.
What is the correct thing to do under these circumstances? Should I wai
or salute?
Willy
Dear Willy,
You must be kidding. The correct protocol is to look away. Definitely do
not wai unless you want to end up peeing in his pocket.
Dear Hillary,
Why is it that some of the tourists that come over to Thailand become
ugly fat, pawing, groping drunks. You can find them in any bar in any
town in Thailand, and most of them seem to come from English speaking
countries. It does the local scene no good, and doesn’t do much for
them either. Do you know why, wise Hillary?
Drunken Bums
Dear Drunken Bums,
Yes, of course I know why, Petal. It’s because they are ugly, fat
pawing, groping drunks at home, but probably their wives kept a tight
leash on them. They don’t change when they come here (and some don’t
change their shirts either, judging by the smell), but our more free and
easy scene in the bars means they can give vent to their animalistic
desires. As long as they pay for it, in the fee-for-service point of
sale bars, they get away with it. There is no hope for people like that,
but unfortunately all inexpensive tourist cities get them. That goes for
other countries as well as Thailand. The good news is they only come
over here for three weeks. The bad news is that they come back again
next year!
Dear Hillary,
I have been a non-smoker for five years, so I do not smoke cigarettes
these days, but I am getting tired of people saying, “Do you mind if I
smoke?” and then just lighting up as if it were their ‘right’ to
do so. I don’t like it, I don’t like the smell of smoke in my hair
and clothes. How do you stop this?
Anti-smoking Aunty
Dear Anti-smoking Aunty,
There is much you can do. When the smoker drops the “Do you mind if I
smoke?” into the conversation, you have to come straight back by
saying, “Actually I do mind. It gives me very bad sinus and I don’t
like the smell in my clothes. I’m sure there’s an area outside for
smokers. Thank you. I am sure you will understand.” You have not been
rude, as the smoker had not been rude either by just lighting up without
asking, but you will have firmly stated your position, and given the
smoker a face-saving alternative.
Psychological Perspectives: Researchers identify factors responsible
for change in psychotherapy
by Michael Catalanello,
Ph.D.
Although still somewhat of a novelty in
Thailand and other developing nations of the world, the use of
psychological therapies to resolve interpersonal issues and alleviate
emotional suffering has exploded in recent years. In 1996 researchers
reported that the number of professional therapists had increased by 275%
since the mid 1980s.
Today people in the developed nations of the world
seeking help with mental health problems need not look far. Mental health
services are currently provided by numerous categories of professionals,
including psychologists, psychiatrists, psychoanalysts, social workers,
licensed professional counselors, marriage and family counselors,
psychiatric nurses, alcoholism counselors, addiction specialists, members
of the clergy, and any number of others who profess competence in the area.
A similar trend has been seen in the growth of therapy
models and techniques used to treat mental health problems. It has been
estimated that there are more than 200 therapy models to choose from, each
one claiming particular effectiveness and curative power embodied within
their various rituals and procedures. Studying growth trends in
psychotherapy techniques during the 1980s, researcher Sol Garfield
predicted, “…that sometime in the next century there will be one
form of psychotherapy for every adult in the Western World.”
Before long, the appearance of rival therapies generated
an interest among researchers to identify the most effective therapies, and
to weed our therapies demonstrating little or no utility. The ensuing 40+
years of therapy outcome research, taken as a whole, produced a very
surprising conclusion: Although therapy clearly works, no specific system
of therapy has emerged as consistently more effective than the others.
Luborsky, Singer, & Luborsky dubbed this the “Dodo Bird Verdict”
borrowed from Alice in Wonderland. “Everyone has won and all must
have prizes.”
This finding eventually led to efforts to identify
elements common to various forms of psychotherapy that might account for
their general effectiveness. As early as 1936, psychologist Saul Rosenzweig
suggested the notion that the effectiveness of different therapy approaches
might be attributable to common elements, as opposed to their theoretical
foundations.
In their recent book, The Heart and Soul of Change,
building on the work of Dr. Michael Lambert of Brigham Young University,
psychologists Mark Hubble, Barry Duncan and Scott Miller identified four
factors they believe to be the “active ingredients” of effective
therapy. They consist of 1) client/extratherapeutic factors, 2) relationship
factors, 3) placebo, hope, and expectancy, and 4) model/technique
factors.
According to these investigators, characteristics of the
client and his/her life circumstances are the primary contributors to the
therapeutic outcome. Each client brings to therapy a number of personal
resources, such as a sense of responsibility, persistence in the face of
adversity, supportive family members, religious faith, an education and
work history.
Chance factors that periodically affect clients’ life
circumstances would also be included here, such as landing a new job, the
establishment of new supportive friends, winning the lottery, and the
readjustment of life stresses. According to Lambert, client and
extratherapeutic factors are, by far, the most potent contributors to
change in psychotherapy, accounting for 40% of the outcome variance.
Relationship factors are those that result from the
quality of the relationship or “alliance” between the client and
therapist. These are identified as “caring, empathy, warmth,
acceptance, mutual affirmation, and encouragement of risk taking and
mastery.” These factors are believed to account for 30% of the
therapy outcome variance.
It is a widely known fact that the client’s hope and
expectancy also contribute to favorable treatment outcomes. When a person
enters treatment with a credible professional, he generally expects a
favorable treatment outcome. Drug researchers, aware of this fact,
routinely utilize inert substances, known as “placebos,” to control for
such factors in clinical drug trials. This expectancy, in itself, can
contribute to a patient’s feelings of relief, and a sense of well-being.
Lambert places the contribution of these factors to treatment outcome at
15%.
Model/technique factors consist of the set of beliefs
and procedures promoted by the particular treatment approach. Lambert
suggested that these characteristics, like those of expectancy, account for
only 15% of the outcome variance.
The surprising conclusion offered by this body of research and its
implications have yet to be fully absorbed by professionals in the mental
health field. Some theoretical camps continue to squabble about the
differences among various techniques. Controversies over theoretical models
seem minor, however, compared to the relative importance of the more
salient common factors in affecting treatment outcomes. During the coming
years it will be interesting to see to what degree practitioners modify the
way in which they provide mental health services, in response to the
compelling findings produced by these clinical investigations.
Dr. Catalanello is a licensed psychologist in his home State of Louisiana, USA, and a member of the Faculty of Liberal Arts at Asian University,
Chonburi. You may address questions and comments to him at [email protected], or post on his weblog at
http://asianupsych.blogspot.com
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