Protecting yourself and your family should be key in your financial planning. Most people only have a policy to cover their mortgage, if that. Protection goes further than just covering the mortgage, if you were to fall long term ill who would pay the bills?
As a life insurance adviser, I like to use the following example, if you had an Automated Teller Machine (ATM) in your front room and every month you pushed a button and £5000 would come out - would you insure the ATM to do this each and every month? I am sure most people would say - YES. You as the Breadwinner are the ATM, so does it not make sense to insure yourself and protect your income, lifestyle and family? This is a simple example of the importance of having adequate protection in place for yourself and your family.
Below are the protection policies you need to consider for covering yourself and your family:
Life Cover - This is the basic life cover and pays out on your death, This can either be on a Decreasing basis, for example to cover your mortgage or level term cover, for example a policy of £500 000 to age 70, this will always be £500 000 worth of cover to the age of 70.
The plan will have no cash in value at any time, and will cease at the end of the term. If premiums are not maintained then cover will lapse.
Critical Illness Insurance - This would cover you for approximately 30 -50 critical illness definitions. This pays out on diagnosis of a critical illness. Some policies also pay out a percentage of the policy for some smaller critical illnesses. Critical Illness Cover can be combined with a life policy, so in the event of death and no critical illness the policy would still payout.
The policy may not cover all definitions of a critical illness. For definitions please refer to the Key Features and Policy Documents.
Income Protection - Income protection pays out a monthly income as a replacement to your salary in cases of serious ill health or accident. These can be taken out on an “own Occupation” basis or an “any occupation” basis. An own occupation plan will cover you if you cannot do your current or equivalent job; whilst an any occupation policy would mean if you are able to work in any role you will have to return to work i.e. it only covers you if you can’t do “any” occupation.
Private Medical Insurance - As the name says, it pays for private medical at a hospital near you. There are various options from a Hospital Plan to a full Private Medical Insurance for the whole family.
Wills - A Will is a fundamental requirement in Financial Planning, you can specify what happens to your Estate in the event of your death. It is also very important when you have children as you can specify guardians for your children, Trustees for your Trust if you have one. A basic Will can be inexpensive and everyone should have at least a basic Will in place.
Wills are not regulated by the Financial Conduct Authority