Mechan and Nikel were good friends. They were both very good engineers and they started an engineering consultancy firm 10 years ago. In the early days, they worked 16 hours a day and 7 days a week and until 1 year ago, thanks to their past tireless efforts, the firm has grown to a RM10million-a-year business.

One day, Mechan had an accident at the site and died on the spot. Initially, there were some disruption to the operations of the firm. Since all cheques require both Mechan and Nikel’s signatures, the firm was unable to pay its suppliers and workers’ wages and salaries. Some suppliers were kind enough to extend the credit terms, but a few stopped delivery of some crucial materials causing delay in some of the ongoing projects. The firm had to pay huge liquidated damages to the main contractors. The widow of Mechan begged Nikel to continue to pay monthly allowances to the family as they really needed the money for their daily expenses. Nikel was able to accommodate for the first few months, but as the effect of the loss of projects and payments for liquidated damages set in, the firm no longer had the cashflow to pay the allowances to Mechan’s family. Nikel was faced with increasing workload as he needed to take care of the job functions which were previously Mechan’s responsibilities. The firms’ staff were also leaving in droves due to lack of confidence in the survival of the business. Mechan’s widow was seen coming into the office every other day to see Nikel to ask for payments. Whenever Nikel was unable to pay her, she had no choice but to persist and share her unhappiness with all her friends and relatives. She suspected Nikel was not honest and had betrayed her. One day she asked Nikel to buy over the shares of the firm she inherited from Mechan. Since she knew that the firm was worth at least a few million ringgit, she demanded RM3million from Nikel. Nikel told her the truth, that the firm’s business was going downhill ever since the demise of her husband, and he can only offer her RM300,000. She refused and went on to seek legal advice.

To cut the long and sad story short, eventually Nikel was forced to set up a new company called Nikel Engineering Consultancy Sdn Bhd, taking along with him all the clients of his former company. Today, Mechan Nikel Engineering Consultancy Sdn Bhd is in the process of winding up. Mechan’s children stopped studying in a private school and his widow was last seen going for job interviews. She was a full time housewife up till a year ago.

Conclusion: as we can see, the chances of the above event happening is very real. The best way to avoid such a mess is to ensure that a proper Business Value Protection Programme is in place.

I had been very busy for the past one week promoting the Business Value Protection Programme (BVP). To my surprise many people have not heard about such an arrangement and many thought that it is a new insurance product and it is too good to be true.

Business Value Protection Programme, Business Continuity Programme, Business Succession Planning and Business Estate Planning are essentially the same thing but from different parties’ perspective.

From the business enterprise perspective – Business Continuity Programme is meant to ensure minimal interruptions to the operations of the business in the event of a loss of one or more of its key partners/shareholders.

From the business owners’ perspective – Business Succession Planning is meant to ensure there is somebody capable to take on the leadership role to carry on the business.

From the estate and heirs of the deceased business owner – Business Estate Planning is crucial in safeguarding their interests by ensuring they get a fair price for the disposal of the interests in the business held by the deceased business owner.

It is worthwhile to note that business buy-sell agreement is only a component of the Business Value Protection Programme (BVP). A complete BVP includes a business buy-sell agreement, the power of attorney to transfer the shares, the insurance plan and the trust deed.  

In my opinion, Business Value Protection Programme is the best terminology to describe the arrangement, as its main purpose is essentially to protect the value of the business so that the interests of all the stakeholders are taken care of.

2 days ago I went to see a client. He was really upset about his insurance policies. He is scheduled to go for a heart operation today, and the amount he could potentially claim from his life policies is only RM70.00! Although the entire cost of his surgery will be covered by his company’s group medical insurance policy, he is not happy with the meagre sum claimable from his own life policies. The surgery, i suspect is a key-hole surgery, not an open heart surgery.

It began about 15 years ago, when he was an insurance agent himself. He bought 2 life policies with attached Hospital Benefits of RM30 per day and RM40 per day respectively. When I first became his insurance consultant, I told him to let me have a look at all his existing policies, but he did not find it a priority to do so.

I was sitting in front of him accross his huge working desk in his office room, and he was telling me about how unfair insurance companies are, how he had contributed the premiums for the past 15 years and all he could claim is RM70 per day if he is hospitalised. Further to the grumbling, he also mentioned he had had a bad day and scolded some people. I sensed that what he was saying was unreasonable and he was definitely not well. So it was time for me to use some NLP (Neuro Linguisist Program) methods. I agreed with him on how he felt and raised my voice and speech rhythm to match his. I gave him a ’clarification’ question by asking “Are you saying all these in front of me because you felt that I am responsible for all this?”. Immediately he stood up and replied “I am not blaming you, I have never said that I blame you and did you hear me say that it was your fault? It is just that I feel really cheated. I have been consistently paying the premiums and now when I need it, it is such an insultingly small amount”. Then I stood up (to match him) and said “Insurance companies pay claims according to the terms in the policies, and to put crudely, you bought a small underwear when you were very little and now that you have already grown up, the underwear no longer fits you” (said in a loud and fast way to match him). Then he smiled a little and agreed that it was indeed a very small underwear and he is a grown man now.

Then he sat down and said “Can you help me cancel all the hospitalisation benefits with immediate effect? I have just paid the renewal premiums and I want the money back”. In response, I had to manage his expectation by saying that since the premiums have already been paid and the unexpired amount is small, we will just leave the amounts in the policy. Then he boomed again “I don’t trust you agents, I want the cheque! I know it may be less than RM100, but I want the cheque, I don’t care. I know it is very troublesome for you but you have to do it, I don’t care!”. In my opinion, I don’t mind doing it for him.  In fact, I have done lots of these similar services for people who are not even my customers. The only reservation was the phrase “I don’t trust you agents”. I must save this PR disaster on behalf the entire insurance industry. So this was what I came up with. I told him “I have never seen your previous 2 policies, who knows you might have some other riders (term attached to life) or supplementary benefits that are just as small and you may want to get rid of them? You know, some other ’small underwears’ you may want to discard? Please bring the policies and fill up the ‘Alteration Forms’ to cancel the insurance benefits that you may consider irrelevant. We will photostat the forms and you keep one copy and I keep one copy. This way you don’t need to trust anybody but your own eyes”.

After saying this, there was a moment of silence and he said “Ya! I will bring the policies to you and thanks for dropping by”. I replied “Take care my friend and I understand how you feel”. At this very moment, his face squirmed in pain. He put his hands on his chest and said he felt very unwell. Then he put both elbows on the table whilst he was in a sitting position, dipped his head between his elbows and looked down onto the floor. I got worried. I asked his staff to get the Ambulance, but he insisted it was not necessary, and he had been on the ambulance once before and but this time no need (not bad enough I guess).

Insurance consultants are a well trained lot, if I may say so myself. After some years, we are quite ok with handling our own emotions when it comes to customers service. But one thing I can never get over is the sadness of seeing people falling ill, very …. very ill. 

Heart disease is a silent disease. This means it just happens without any warning. If you are overweight or have a significant belly you are almost certain to have it. Having it means, at least the heart arteries are already clogging up. It is high time to go for a medical check up and/or enter into some slimming & fitness programme.