WHEN speaking to our clients, we remind them that our motto here in the office is ‘life’s better with a plan’.
We advise everyone to plan ahead in case something goes wrong – because something always goes wrong.
This could also serve as the unofficial motto of the insurance industry, because insurance is protection for ourselves and our families, for when the unexpected happens.
The insurances that are designed to protect our families are, not surprisingly, known as family protection insurances.
The most well-understood of them is, of course, life insurance. It does what it says: it provides a financial payout in the event of your death.
As such, we don’t take out life insurance for ourselves, as we won’t be around. We take it out to provide something of a financial safety net for our family. At least they will be relieved of financial worries, at a very difficult time.
Industry experts sometimes say that, while life insurance is what you take in case you die, there is another insurance that you take out in case you don’t die. That is critical illness insurance.
If you are unfortunate enough to suffer a major health setback such as cancer, a heart attack, or a stroke, you could be off work for years – if you’re ever able to go back at all.
A survey last April also revealed that over a quarter of people (26 per cent) have no financial reserves to speak of, to shelter themselves and their families against the effects of losing an income, either through death or illness.
This could be disastrous for your family. The Association of British Insurers (ABI) has said that most (60 per cent) working families would lose a third of their household income, if the main earner had to stop work, and 40 per cent would actually lose half.
Cancer is the biggest critical illness by a long way, and MacMillan Cancer Support tell us that more than half of us will suffer some form of cancer during our lives.
Critical illness is not just an older person’s problem, either.
The average age for claims is just 47, just when many of us will have children coming into their late teens or twenties and, perhaps, needing our financial support to go to university, get married, or put together a deposit to buy their first home.
Should you perhaps think about adding family protection insurances to this year’s list of New Year resolutions, so that your loved ones are more financially secure for 2022?
:: Michael Kennedy is an independent financial adviser and pensions specialist and can be contacted on 028 71886005 . Further information on Facebook at Kennedy Independent Financial Advice Ltd or at www.mkennedyfinancial.com
