Don’t Underestimate the Need for Protection Policies

The Need for Financial Protection

One of the most fundamental aspects of financial planning and one which is often overlooked is protection. In other words, addressing the issue of what would happen to your family financially in the event of your death or incapacity.

The statistics are worrying – according to research carried out by LV, around 74% of mortgage holders have no protection in place.

Only one in ten people surveyed by LV said that they had Income Protection or Critical Illness Cover in place.

We all like to think that nothing bad will happen to us but let’s take a hypothetical couple, Tom and Anna, who are both aged 35 and non-smokers.

According to LV, there is a:

57% probability that one of them will be off work for two months or more.
27% probability of one of them suffering a serious illness.
9% probability of one of them dying.
65% probability of any of the above happening.

Employee Benefits

Many people will have some form of protection via their employer. This could take the form of:

A Group Death in Service scheme paying a multiple of earnings in the event of death.
A Group Income Protection scheme which pays a proportion of salary in the event of a person being unable to work.
A Group Critical Illness scheme which pays out a lump sum in the event of being diagnosed with an illness or disease specified within the terms of the policy.

It is important to remember that these schemes may not necessarily cover all of your liabilities or mean that your family will remain financially comfortable. You may need to take out additional cover.

Some employers may not offer these types of arrangements.

In addition, more and more people are working for themselves and may not have considered putting in place any protection policies.

Protecting Your Family’s Lifestyle

When we work with clients to help them design their ideal lifestyle, we always ensure that this lifestyle can be protected should the worse happen.

Is it time to review your protection benefits and to ensure that you and your family are protected?

Contact Us

Please do contact us if you want to discuss this important aspect of financial planning.