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It may be the last thing you want to think about, but part of responsible family financial planning entails considering what would actually happen if you or your partner dies.
Will they or you cope financially on your own? What about your children? Can outstanding family debts be repaid? Can the children be brought up and educated the way in which you both envisaged? Will it be possible to maintain the existing family home?
It’s possible to ensure that all of these questions are answered positively for a relatively low cost, yet in the UK 8.5 million adults and 60% of women with dependent children have no life cover in place according to Scottish Widows.
Setting up appropriate cover isn’t complex but there are a number of factors to consider. You can take out cover for a specific period of time (Term Assurance) or for the whole of your life (Whole of life cover). One or both of you can be insured and the amount of cover can decrease, increase or remain level. Benefits can be paid as a lump sum or as a tax free income (Family Income Benefit). Some arrangements can also be renewed or converted into other arrangements in the future.
Most importantly, many types of cover can be wrapped into a trust, which avoids delay in the payment of the benefit on death of the person insured, or losing money in the form of tax.
These are serious decisions and will make a meaningful difference to your family when it counts. Taking advice on the best approach for you is likely to be more appropriate than using a comparison site in the hope of simply obtaining the cheapest product, which may not meet your needs.
You may be surprised to learn that you are nearly five times more likely to suffer a serious illness before the age of 65 than you are to die. Most people know someone who has had a serious health issue and can see how frightening and debilitating it can be. In the event of a serious health issue life can turn upside down, so worrying about money is he last thing you’d want.
You can easily provide for yourself and your family but the choices you make are important. What illnesses are covered on a contract? How serious does the illness have to be for the insurer to pay out? What happens if you’re not in the best health now? How does it fit in with your other financial priorities? Many will think nothing of buying a car or even home insurance, yet having health problems can have more of an impact on your life than if you have problems with your car or home contents.
What if you’re unable to work but don’t have a major illness? If you’re employed, your employer may pay you for a short while if you are off sick, but where are you going to get an income from when this stops? Living off the State isn't a realistic option for most people, plus there are many illnesses and accidents that can keep you off work for months or even years. When asked how they’d cope should they or their partner be unable to work for 6 months 29% of mothers said they would rely on state benefits only but how realistic is this? Income protection can help.
Our Financial Planning Consultants can add significant value by ensuring that you have the appropriate protection in place for all the uncertainties that ill-health and death can throw at us. Contact our team on 0808 144 5575 to discuss your needs visit our website to contact one our team.Contact Us
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