Understanding Personal Protection
With all the news of turbulent markets, summer budgets and personal finance in the last few months, personal protection can get a bit lost. While not quite a Viking shield, protection is about securing your finances or looking after the financials of those closest to you should the worse happen.
Life cover, Critical illness cover, Income protection, Private Medical, Accident Sickness and Unemployment cover, Group Income Protection, the list goes on. So what’s the key to understanding personal protection?
Start with the basics – what would I like to protect and how much money is needed to do that?
If I was to get injured and be unable to work, how would the bills be paid?
What if I was to have a serious illness such as a stroke, heart attack or some form of cancer?
Potentially Critical Illness Cover might be what you need. This is a one off, tax free, lump sum payment, you might use it to pay off the mortgage, make home adjustments, pay down debts.
And what if I was to pass away? How can I make sure that the bills will be paid and that my family will be financially secure?
Life insurance can potentially pay your dependants either a lump sum or regular income to provide when you are gone. It’s important to check whether your policy is in trust, so that it can be paid out to your beneficiaries IHT-free.
As you can probably see from the above, the running theme is about financial security for you and the ones closest to you.
So how much do I need and what will it cost?
You may already have some protections in place without knowing it. Check with your employer or place of work to see what’s there – it might be that you only need a slight top up. Ask them about death in service and any group schemes in place. If you’re self-employed, it may be even more important to consider protection, since you won’t have these valuable employee benefits.
The cost of protection is dependent on a number of variables; like the amount of cover you need, how long you need it for and your current personal circumstances. However, depending what policies you need, it might start at just a few pennies each day.
We can go through this with you to figure out what’s most suitable for your current needs and circumstances, so if you have any questions about the above please do get in touch.