Insurance is the most important financial planning priority for all workers as it protects you and your family’s future.
It is vitally important to make sure that you have the right type for your needs. Different types include: -
LIFE INSURANCE – This protects your family and dependants in the event of your death and includes:-
a. Term Assurance - Simple and cheap; you pay a set premium and your family get paid a specific lump sum on your death for a set term.
b. Mortgage Protection - Pays off your mortgage if you die; payments decrease in line with your mortgage.
c. Family Income Benefit - Provides regular monthly payments to your family for a specified period.
d. Whole of life - Will pay a lump sum for as long as the premiums are maintained.
HEALTH INSURANCE – This protects you in the event of ill health and covers: -
a. Income Protection - Replaces your income if you cannot work for more than a specific period.
b. Accident and Sickness - Short term protection for yourself and family against being unable to work, or a lump sum in the event of a disability such as loss of a limb.
c. Critical Illness - Pays a lump sum on the diagnosis of a specified condition such as cancer, heart attack etc. This can cover the mortgage, pay for lifestyle changes or help with long term treatment costs.
d. Medical Expenses - Meets the cost of private health treatment (e.g., BUPA).
e. Long-term-care - Protects against the high costs of nursing treatment later in life.
Whilst companies provide some personal accident cover this often falls short of the level needed by the families of those killed or who are ill/injured. It is your responsibility to make sure that both you and your family’s current and long term future is adequately protected. The best way to do this is to discuss your situation with a qualified independent financial advisor”.
