Most people think of life insurance as the first line of defense for their families and assets. But just as you maintain sophisticated investment and estate plans, experts argue that wealth holders should have a comprehensive risk management plan to protect themselves, their families, and their businesses against virtually any type of loss.
Making Your Success More Secure
When designing a personal risk management plan, the types of insurances protections and strategies you may want to explore include, but are not limited to:
- Residential homes, condominiums, apartments, and cooperatives
- Life, disability, accidental death & dismemberment, and long-term care
- Highly valued assets including fine art collections, antiques, jewelry, furs, stamps, firearms collections, and valuable memorabilia
- Personal liability, not-for-profit liability including directors and officers coverage, and incidental business liability
- Workers’ compensation for domestic employees
- Kidnap and ransom protection
Sign of the Times
Of these potential protections, kidnap and ransom (K&R) policies — typically not the most sought after insurance — have grown in demand in recent years. Certainly the events of September 11, 2001, sparked new concern about personal security. Conflicts in the Middle East and other global troubled spots have fueled anxiety among Americans about terrorism risks at home and abroad.
Emotions aside, how urgent is your need for this level of personal protection? Experts suggest that K&R policies are most appropriate for high-profile individuals, such as celebrities or wealthy businesspeople who travel to places where kidnapping is common. If you work for a corporation and travel for business, your employer is increasingly likely to offer the coverage you need.
K&R Coverage and Costs
Standard K&R policies generally cover the most obvious expenses associated with kidnapping, such as ransom reimbursement, hostage negotiation fees, counseling fees and medical coverage for the victims and their families. Corporate policies typically range between $1,500 and $5,000 annually for $1 million of coverage, while the cost of coverage for individuals depends on a personal risk assessment, with the high-risk individual — a frequent traveler to danger zones who is also in the public eye, such as a prominent corporate executive — paying the most.
Many affluent individuals prefer to take matters into their own hands and set aside enough assets to pay a ransom and hire security specialists in the event of a kidnapping. Perhaps the most practical, and least costly, strategy is to take precautions to stay out of harm’s way, be it in a foreign setting or in your backyard. Simple common sense measures, such as taking non-stop flights and using hotel transportation at airports are sound safety practices. In addition, being “present” and aware of your surroundings is important whether you are in New York City or Mumbai, India.
So, how real is your need for K&R protection? Only you can judge.