We know that financial planning is essential for long-term success, especially when it comes to providing for you and your family’s future. However, the majority tend to focus on the “wealth creation” part of financial planning and put off the “asset protection” part thinking it will never happen to them. We don’t think twice about insuring our homes, our cars, our expensive valuables but is your life equally insured?
The right type of insurance can come to your rescue in uncertain times and when your family needs it the most.
Types of Protection
Term Life insurance is the most cost-effective way of providing Life Insurance. While it will never acquire a cash value, the sum assured/ death benefit will be paid out to your beneficiary or beneficiaries in the event of your death as the life insured. This can be used to pay off or service ongoing liabilities such as mortgages, inheritance tax, education fees, whilst also maintaining your family’s standard of living.
Remember, some peace of mind is always better than nothing.
Critical illness Insurance is often overlooked but is arguably one of the most important personal protection covers. Unlike medical insurance, which will reimburse you for medical expenses, critical illness insurance provides the insured with a lump-sum payment if the policy is triggered with a diagnosis of one of the defined critical illnesses in the policy. Nowadays, some policies also have multi-pay options and coverage for early-stage critical illnesses.
You can use the funds to replace lost income, pay for private medical expenses after your medical insurance is exhausted and pay off any other debts. You should also consider the financial consequences of survival if you cannot return to your previous way of life.
Finding the Right Time
Many people will only start thinking about cover when they have responsibilities, such as a family or a mortgage to fund. However, you need to consider the following:
- As you get older, coverage will be more expensive.
- You cannot guarantee your health – adverse medical history could present problems with insurability.
- You are almost certainly going to need cover at some point.
The time to protect yourself and your loved ones is always now.
Cost of insurance will always be a major consideration, but your circumstances and requirements are unique to you. A thorough overview of the market is essential for your understanding and decision-making process. Working with an independent advisor can save you not only time and money but importantly ensure the protection provides the cover you need.
