So why should you worry about life insurance, critical illness cover and other types of protection when you have just bought your dream home and are more worried about the carpet and curtains than whether you are going to die!
Well, new statistics from one of the UK’s leading life insurance companies show that an amazing 48 per cent of life insurance claims were made for people under the age of 50! In addition, 44 per cent of critical illness claims were made by people under 40!
While it maybe morbid to think of the end of your life or a life threatening disease when you are at the age to party, it really I important to consider protecting the finances of your nearest and dearest in the event anything happens to you.
This month’s jargon buster is PHI. PHI (Permanent Health Insurance) or Income protection insurance is an insurance that will pay you a replacement income if you cannot work through illness or accident. While Statutory Sick Pay (SSP) is paid by your employer for up to 28 weeks it is unlikely to cover all your outgoings and certainly if you are off work for a long period of time can really make a difference. As with all insurances there are many companies who provide PHI and it is always worth seeking advice from a professional before you take out a policy.
Our consultants at Lyndhurst Financial Management, Barnet office, will be able to guide you through the process. Call 020844755592 for a free consultation.
Our consultants will help you decide how much insurance you need and can afford but the following is a guide to help you calculate how much protection you might need:
Cover your mortgage: – This is probably your biggest outgoing. Your mortgage provider may have encouraged you to take out life insurance when you signed up for the loan: if you did, now’s the time to check you’re adequately covered.
Lost income: – In the absence of your income, ask yourself how much those you leave behind would need to continue enjoying a lifestyle and standard of living that they are comfortable with. This is always a tough one, as none of us knows what the future will bring, but it’s better to over-estimate a little here.
Critical illness cover: – If you were to fall seriously ill and were unable to work, you would have to find some way to cover not only living expenses but also any medical costs you may incur. Whether you recover or not, you or your family could be left in a sticky situation financially.
These are clearly difficult subjects to consider but you are never too young to begin the process.
Geoff Newman, Director, Lyndhurst Financial Management Ltd. Authorised and Regulated by The Financial Services Authority.