Money is the opposite of the weather. Nobody talks about it, but everybody does something about it. – Rebecca Johnson.
For example, we all insure our car, thinking nothing of it, as it is far cheaper to insure than for us to pay out personally in the event of an accident (not to mention it is illegal to drive without insurance). Unless of course we do not have a car – then there is no point.
But what about our valuable selves?
Are you single, cohabiting, married, with dependants? Are you employed, self employed, a homemaker or stay at home Mum?
What do you need to protect? Is it a liability, eg. a mortgage, an asset, yourself, your dependants or your estate?
Let’s think about this.
In the event that you were unable to work (as a result of sickness or accident) and maintain your regular income where would this leave you? Could you pay the bills? Continue to repay your mortgage? You may have earned savings available to fund you –but you may not.
If you had a policy to protect your income the outcome could be significantly different. You may be able to protect the value of your savings and be provided with a regular income, until you are able to go back to work, to enable you to cover your day to day living costs. This may be the difference between maintaining your mortgage/rental payments and losing your home!
What if there are children involved? There is likely to be further planning required in order to meet the costs of their on going needs in the event of the unforeseen.
This doesn’t just apply to working women either. Stay at home Mums have a huge responsibility, which comes with an equally huge value. If their role cannot be fulfilled due to illness, accident (or even death) the costs of covering this can run into millions!
Personally, one of my health fears is a cancer diagnosis. Therefore, I have my own critical illness policy that will pay me a lump sum in the event of the diagnosis of a critical illness – well if I am going to have a serious condition I may as well be paid for it!
Basic insurances can be really cost effective in terms of premium versus potential benefit but it is essential that you obtain the most appropriate protection for your needs at the time. Your protection needs will change as your life changes and therefore having a relationship with an adviser can offer many benefits, not just to advise on the right protection to meet your needs.
Protection is such a minefield of products therefore I would always advise talking to a professional about protection and insurance.
Georgina Wright is a Chartered Financial Planner and Partner at Abbotstone Financial Solutions. Connect with Georgina on LinkedIn.
