Have you ever thought about how your family would cope without you if you were to die suddenly? It is just as important to consider this question whether you are the family bread winner or are looking after the family. Both positions carry equal importance, and the consequences of sudden and untimely death may be devastating. For single parent families, protecting the children becomes even more important.
Most of us would like to believe we will have a long life but the fact is that every day people of all ages die suddenly, and leave behind them families and loved ones who will have to manage on their own.
Providing for your family's financial security in the event of death is a fundamental and crucial part of financial planning. There is a vast array of contracts available, from low cost fixed term policies to arrangements which offer a combination of protection and savings.
In most instances, the deciding factor will be the cost. Life Assurance policies are able to provide valuable cover from as little as £5 per month. The greater the level of cover required the greater the cost, which is why independent financial advice is so important - to find the best level of cover for the most competitive premium.
For many, the prospect of a lump sum being paid on death is not as appealing as the payment of a regular income. Whilst a lump sum can be invested to produce income, this will involve regular investment decisions being made.
As an alternative to conventional life assurance, a Family Income Benefit plan will guarantee to pay, on the death of the insured person, a regular monthly income for the remaining term of the contract. This plan is particularly useful for parents with young families, where the regular income can be used to meet the ongoing bills such as mortgage payments, child care, loan payments and general household expenses.
For single people or young couples with no dependants, the need for life assurance cover is relatively low. However, what would happen to your lifestyle if you were to develop cancer, suffer a heart attack or stroke, or have to undergo a major organ transplant?
Critical illness policies have been developed to provide you with a lump sum, if you are diagnosed as suffering from a critical illness, or need to have a major surgical operation. Statistically, there is a far greater chance of suffering a critical illness before retirement than there is of dying.
With advances in medical science, more and more people are surviving a critical illness, but very little financial support is available afterwards. The lump sum payment from a critical illness policy can give you the freedom and ability to cope with the changes in lifestyle which would follow a critical illness.
With contributions starting from as little as £10 per month, this is a form of protection everyone should be considering, whatever their circumstances.
1 in 30 people of working age have been off work for over a year, due to sickness or accident (Source: DSS statistics)
A sudden illness or injury is something which can happen at any time. It can strike anyone when least expected, causing great disruption in daily life. If you were suddenly hit by a serious illness or injury, would your employer be able or willing to maintain your income until you were able to return to work? What would happen if you could never return to work?
Permanent Health Insurance (not private health insurance), provides a regular income if you are unable to work after accident or illness. The income can start as early as 4 weeks after the incident, or the start can be deferred for as long as twelve months. The deferred period will depend upon how long your employer would be willing to continue paying you. If you are self employed, it is likely that income will dry-up quite soon after you became unable to work.
Contributions to a PHI policy can start from around £10 per month, and the contract can provide you with peace of mind, should ill health stop you from working.