It is important to consider the risks associated with your financial situation in the event that something should go wrong.
As a general rule, you should have sufficient funds set aside to protect yourself in the event of an unknown short-term expenditure requirement. Ideally, you should hold a sum sufficient to cover your essential outgoings for at least 3 months.
However, for larger liabilities (such as mortgages, unsecured debts or an Inheritance Tax liability), you should also consider the benefit of arranging suitable protection plans.
There are different forms of protection plans available to help protect you, your family and your business in the event of ill health, a critical illness or death.
These include the following:
- Life Insurance – this will pay your dependants a lump sum or regular payments if you were to die unexpectedly. This type of cover will provide you with reassurance that your loved ones will be able to cope financially without you.
- Income Protection Insurance – this is designed to support you financially, should you be unable to work due to an illness or serious injury.
- Critical Illness Cover – this can be arranged on its own or in addition to life cover and is designed to pay out a lump sum, if you were to suffer a critical illness.
The above protections offer valuable benefits should the worst happen. However, the key to deciding what protection you need is weighing up the risks and benefits of protection insurance against the cost and level of cover provided.
As an example, if you have children, you might decide that you need Income Protection Insurance to cover you in case you become unable to work, as well as Life Insurance to ensure your dependants are taken care of, if you were to die unexpectedly.
These types of cover can also be arranged for business purposes to protect a company’s income or loans in the event of the loss of a key member of staff or shareholder.
The above is not an exhaustive list and there are other options available to provide cover for such areas as Private Medical Insurance and Long-Term Care.
“Being a financial planner is really rewarding and I love what I do. I enjoy putting people’s minds at rest by showing them how they can enjoy their desired lifestyle without having to worry about money. We offer a flexible, transparent approach, which allows my clients to make the right decisions about their future. Financial planning done properly can give you more time to enjoy more of what you want to do, as well as a better standard of life.”
Miles Sneath, Director & award-winning Chartered Financial Planner