Title: Risk Evaluation Test

Q: What is your marital status?
- Married (correct) (A wife/husband/partner would probably expect you to have your business protected)
- De Facto (correct) (Your partner would probably expect you to have your business protected)
- Single and loving it! (Whilst you may not have a partner now you may have one in the future)

Q: Do you have a family that relies on you for financial security?
- I have children (correct) (How would your children fare without your business funding their future?)
- I do not have children but plan to in the future (correct) (It is worth considering the impact of children now.)
- I do not have children and never plan to either! (You have limited financial responsibilities.)

Q: How many owners in your business?
- I am a sole owner/operator (You do not need a Buy/Sell Agreement)
- There are 2 or more owners of our business (correct) (You need a Buy/Sell Agreement)

Q: What is your share in your business worth?
- I have no idea, its never been valued (You can get an indicative valuation by using our valuation tool in Step 2)
- Under $1.5m (correct) (You can get insurance via Lloyd's of London without blood tests or medical exams)
- Over $1.5m (correct) (You can get insurance with Lloyd's of London up to $20m and may be required to have blood tests or medical exams depending on the amount of cover required.)

Q: Is you car insured?
- Yes (correct) (You can see the need to protect your assets)
- No (You are a risk taker)

Q: If you crashed your car do you think you could potentially hurt yourself?
- No, I am superman. (There is only a very, very small chance you are superman.)
- Yes it is highly likely I could be hurt. (correct) (Isn't it ironic that you insure you car which is worth significantly less than your business?)

Q: What would your business be worth if you died or could no longer work in it?
- More (Your partner/s should have bought you out already.)
- Less. (correct) (Most people overlook this fact and the value is usually significantly less.)

Q: Would you want your partner/s spouse/partner working in your business?
- No (correct) (You are not alone here.)
- Yes (Be careful what you wish for!)

Q: Will your bank lend your partner/s money after losing you?
- No (correct) (You are not alone as bank's are very risk averse when a partner in the business leaves.)
- Yes (You must have a rare bank manager. Be wary as the bank might not think the same way.)

Q: How would your spouse/partner feel if the value came in well under what you had told them?
- Angry, frustrated and suspicious (correct) (This is where all the trouble starts and it get's increasingly worse from here as their is no palatable solution.)
- They'd be fine. (They must be very tolerent!)

Q: Would you lend them money?
- Yes. (You are a high risk taker.)
- No (correct) (Banks would agree with you. Revenue's are likely to fall and so too will the value.)

Q: Would any partner/s leave if you were no longer there?
- No (This may well be the case but it is more common than you might think.)
- Yes (correct) (This is quite common and the business is now one step closer to a fire sale.)

Q: Is there a possibility that your business would end up being liquidated?
- No (Be careful!! This happens more often than not.)
- Yes. (correct) (It is good that you are aware of this outcome as it is quite common.)

Q: Assuming you have a spouse/partner, how would they feel if they recieved 100% of the pre-death value of your shares?
- Happy (correct)
  Hint: This is usually the case.
- Extremely happy. (correct) (This is concerning given your recent death, but not uncommon.)
- Sad, because they probably wish you had died many years ago and they had the money earlier. (correct) (This may be a possibility so be careful out there.)

Q: Given the bank is unlikely to lend the money, would your business partner/s have cash readily available to buy your share?
- No (correct) (This is the case virtually everytime.)
- Yes (This may be the case on rare occassions but will they pay fair market value?)

Q: Would your partner/s be angry if they were left with a huge debt to pay for your shares?
- No (They must be very tolerant.)
- Yes (correct) (You should ask yourself the same question.)

Q: These insurance rates are through Lloyd's of London.  Guess how much cheaper they are compared to Australian Life/TPD policies?
- They are not cheaper (They are acutally up to 30% cheaper.)
- They are the same price. (They are actually up to 30% cheaper.)
- They are up to 30% cheaper (correct) (This is because there are no commissions payable to financial planners.)

Q: What would you pay, as a % of the value of your share in your business, to have it insured?
- 2% (correct) (The average insurance premium is less than 0.5% of the value of the company)
- 1% (The average insurance premium is less than 0.5% of the value of the company)
- 0.5% (correct) (Correct - the average insurance premium is less than 0.5% of the value of the company.)

Q: Your recent passing aside, how would your business partners react knowing you had a Buy/Sell Agreement in place which was fully funded by insurance?
- Relieved, happy and content. (correct) (Imagine the relief you would feel if the roles were reversed.)
- Angry, sad and disappointed. (Tough crowd your partner/s are.)

Q: How would your spouse/partner feel if you had a fully funded Buy/Sell Agreement in place and they received payment for 100% of the value of your share in the business?
- Angry, sad and disappointed. (You're probably better off dead.)
- Relieved and comforted. (correct) (You will never know just how much they will be thankful that you thought of them.)

Q: How good would the ongoing relationship be between your spouse/partner and your business partner/s if you had a fully funded Buy/Sell Agreement in place?
- It would save them a huge amount of unwanted angst and confrontation (correct)
  Hint: Spot on. This is one of the biggest problems now avoided that could have made things horrendous for both parties.
- They would still be fighting and angry. (Some people you just can't please.)

Choose the most applicable answer.

They would be relying on you to have your business insured

Enjoy it while you can

Your family would expect you to have your business protected

You have no family responsibilities