Protecting You & Your Family Against The Unexpected

The current COVID-19 pandemic has certainly bought to light how fragile life can be and how sometimes the risks we don’t even consider during our everyday lives can suddenly become very real.

You may have heard a financial adviser state how many people insure their phone against damage, their pets against illness, their cars against accidents and their holidays against illness (let’s hope we can all go on holiday again soon!) but a much lower number of people insure themselves.

Emergency cash savings

Most of us like to think we have a good level of control over our personal finances, but many aren’t saving as much as they’d like to each month, which results in less savings available to cover life’s unexpected events. Just a third of people in the UK have less than £1,500 in the bank, with many having no savings at all.

A good rule of thumb to give yourself a basic financial cushion is to have three months’ essential outgoings available in an instant access savings account. So, if you spend £1,000 a month on mortgage or rent, food, heating bills and other things you can’t live without, you should aim for £3,000 in emergency savings. But, remember any amount saved will help you if you have to pay for something you weren’t expecting, so save little and often if this is easier.

Risks to your finances

However we also all hear news of a friend or a relative who is off work for more than three months, or has been diagnosed with a serious illness or has unexpectedly died. It’s upsetting and all the more difficult to imagine it happening to us, but would you and your family be prepared?

The rise of crowdfunding pages on social media, perhaps helps to highlight how unprepared many families are for these eventualities.

Some of the risks which could affect your family are as follows:

• Being unable to work due to sickness or accident – If you’re unable to work, making sure you continue to receive a regular monthly income is essential, to ensure you can pay your bills and maintain your family’s lifestyle with as little disruption as possible.  One option is income protection which pays you a regular monthly amount. This can dovetail and top up any sick pay your employer would provide.
• Suffering a serious illness – A little peace of mind goes a long way when you’re dealing with a diagnosis and treatment plan. The road ahead may be uncertain, but putting some financial protection in place will make getting to appointments, recuperating in your own time and dealing with everyday bills easier. And it eases life for your partner too, knowing that your finances are sorted. Critical illness cover provides a one-off lump sum payment on diagnosis of one of a number of defined illnesses covered by the policy you choose. Work out your back-up plan with your financial adviser.
• It’s never easy to think about what would happen if you, or your partner, were to die early. But thinking about how your partner and/or your dependants would cope financially and pay the bills without your regular income brings life sharply into focus.  Life insurance is really important if you have dependants who rely on you financially. So, would a one-off larger pot of money most help those you leave behind? Or maybe a combination of a one-off smaller pot and a regular income? Whichever you choose, you’ll have the peace of mind that if tragedy did strike, your dependants would be more comfortable financially. Talk to your financial adviser about your life cover options today.

Business protection

Business owners should also consider the effects of these risks on their business.

The risk of someone crucial to the business dying unexpectedly, or being diagnosed with a serious illness can be a real concern. Replacing lost profits and possibly recruiting a replacement (with the right skills) can put real financial strain on the business at a difficult time.

It’s important to safeguard your business from this potential issue with the help of your financial adviser and Business Protection cover.

Affordability

When you consider the impact of not having any protection in place, an insurance policy is good value for money. It can help to make sure you and your dependants would be looked after. Talking to your financial adviser about the options available to you.