Wednesday, October 18th, 2017
Here in the UK, it is believed that far too many people have insufficient life insurance (as well as other forms of personal income protection) or worse, no cover at all. In our experience across a variety of age ranges we are able to provide an insight into some of the underlying reasons why this may be the case.
Firstly, it seems that younger people with no dependants felt that life assurance might not be relevant to them, even though many had a joint mortgage (where it is important to protect each party in the event of death of the other). In short, many felt they were simply “too young” to take out life insurance or other personal income protection products.
Furthermore, although many rely on monthly income to pay their mortgage and to maintain their lifestyle, few considered what would then happen if they were unable to work for a prolonged period due to sickness, accident or disability. When challenged, even those individuals who had some cover through work realised that, on its own, it was unlikely to be enough.
Even where such cover does exist, given that the average person changes employers every 5-6 years, it is important to periodically check that the level of income protection in place is sufficient to cover anticipated outgoings.
Consequently, a regular review of circumstances and total income requirements is highly recommended. By way of example, a life insurance policy taken out when you bought your first property may be insufficient to match more current requirements: this may be because the amount (or total duration) of the cover required has increased or, in the case of income protection, that your outgoings are perhaps now substantially higher than they were.
Many people believed that in the event of a crisis, they hoped to be able to access some form of family assistance. Whilst there is little doubt that most families would love to help if they are able to, there are some important points to consider when comparing this option to the insured alternative. For those with dependent children, would those funds be able to pay off your mortgage if you died prematurely? If you could no longer work, could they replace your income? Additionally, would there be a significant lump sum to tide you over after being diagnosed and treated for a serious illness.
Others accumulated savings “for a rainy day”, but the question really is, if your income stopped, how long would those savings last, and how would you then replace them in the future?
In general terms, applicants classed as “young, fit and healthy” can certainly look forward to lower monthly insurance premiums, but no matter what your age, it’s best to seek professional guidance to determine the level of cover that will be right for you in all the circumstances. Wait too long for a quote and cover could get very much more expensive or even become unavailable in the future, should illness develop ahead of policy inception.
Our team here at Caboodle Finance of Sutton Coldfield, Birmingham are here to advise you. If you would like to discuss your individual requirements or make a confidential, no obligation enquiry, call us today on 0121 308 9114 or alternatively click HERE to contact us.
Caboodle Financial Services Ltd
Mere Green House
46-48 Mere Green Road
West Midlands B75 5BT
Telephone: 0121 308 9114