Life Insurance, Serious/Critical Illness and Income Protection…
Does your family have the right insurance cocktail in place?
Getting the right insurance in place for your family’s financial needs is of paramount importance in modern society. For the majority of young families, putting in place the insurance we may need must fit within an affordable budget, so advice needs to be sought in order to create a balanced cocktail of protection and affordability.
“The best time to buy insurance is when you don’t need it. Once you need it, there is a good chance you can’t buy it anymore.”
Losing a parent turns a child’s life upside down. This isn’t a situation most of us like to think about, but if the worst happens life insurance will pay out a lump sum payment to your family which could make a huge difference to their future. It could for example repay a mortgage, pay for childcare allowing the remaining parent to work and support the family, or allow for luxuries like days out and holidays.
Serious or Critical Illness covers pay out a lump sum on diagnosis of a ‘serious’ illness. The list of illnesses covered varies from insurer to insurer, as does the payout amount, so it is essential to seek independent advice. Some cheaper policies will only pay out for very specific illnesses, so getting one that offers good protection is important. This type of insurance is more expensive than life insurance, as the risk of suffering such an illness is greater than death. However, the benefit from this insurance can help with private medical costs and loss of earnings.
“Our biggest asset as young people is our ability to earn an income.”
This is arguably the most important insurance. We don’t think twice about insuring our cars, phones, pets and possessions, yet without a main income your family’s lifestyle would suffer greatly. In the UK, if you are unable to work, the state benefits currently offered by the government may only pay between £99.15 and £105.05 per week, and your individual circumstances will affect how much you receive. On this amount you would struggle to support a family, with rent or mortgage, food, household bills, clothing and childcare. Income Protection insurance will pay out a benefit amount after a deferred period and will continue to pay this benefit if you are unable to work in your own job due to accident, sickness or disability until the end of the term. Whether you are employed or self-employed you are able to insure your income.
Quotes from an article by V. Kunderman