When it comes to protection, are you in safe hands?
It’s no secret that life’s full of surprises, and while many of those surprises may be positive, there’s often a curve ball that may knock you for six. While you can never be prepared for everything, it doesn’t mean that you can’t take more control over your future.
Good surprises - like getting a bigger bonus than usual or an extra day’s holiday - are welcome incentives that spur us on, while surprises like being diagnosed with an illness or the debilitating effects of an accident are much harder to deal with.
When accident, illness, disability or death strikes unexpectedly, the upheaval is tremendous. Without a financial safety-net in place, it can be much more difficult to cope with both the emotional and financial consequences of such an unwanted event.
In our study, ‘Protection matters: does women’s financial planning match their priorities?’ we found that while women agree their top priorities are their children’s health, happiness and financial security, many are ill-equipped to ensure their financial security in the event of serious illness or death.
Indeed, over half of the women we surveyed had no protection insurance at all in place to cover themselves against illness or death.
In order to take control of the future, you’ve got to think about what it might have in store. Although unpleasant to think about, it’s important to consider how an unwelcome event would affect you and your family. What sort of financial support would you need to maintain your standard of living? Together with a financial adviser, our liability audits can be used to help you identify what financial support you might need.
Once you have all that information in front of you, it will then become easier to start putting plans in place that will protect you and your loved ones from the financial impact of an unwelcome turn of events. So, the question is, what is it that holds women back when it comes to protection?
Protection comes at a price, but offers real value
Household budgets are tight across the UK, so it’s perhaps not surprising that our research found that 48% of women believe they can’t afford protection. This figure drops slightly to 45% when it comes to female business owners, but rises to 53% among mothers.
Although perceived to be too costly, are protection policies really that expensive and what do you get in return for your monthly payments? You may be surprised to learn that a 35-year-old, non-smoking female could take out £90,000 of life insurance, over a 25-year term, for just £7.01 a month. That’s not much more than the average £5.39 price tag on a bottle of wine.
As unpleasant as it is to talk about illness, we know that every two minutes someone in the UK is diagnosed with cancer. We also know that during 2013 there were 473 women diagnosed every day with the disease.
One real-life claim shows the positive impact life insurance can have. A young couple (unnamed to protect their privacy) took out life protection with us. They did this to make sure they’d be financially secure and able to cover their mortgage, pay family bills and support their children if something happened to either of them.
Tragically, the wife was killed in a road traffic accident when she was only 39 years old, leaving behind her husband and two young children. Having a protection policy in place meant her husband didn’t have to worry about the family finances on top of everything else he was dealing with. The policy provided him with a lump sum, which he could use to either pay off or greatly reduce his mortgage, and help replace his wife’s income. This allowed him to support his young family at a devastating time in their lives.
In such awful circumstances, solid financial support is invaluable - and available for less than the price of two bottles of wine a month.
Flexible protection fitted to your needs
It’s important to remember that there’s a wide range of protection policies available, which can be tailored to your circumstances, so you only ever pay for the cover you need.
You might, for example, not need a life insurance policy that pays out a lump sum. Perhaps a family income benefit product that pays out an agreed income for a designated period of time would be better.
Say, for example, you agree to a term of 20 years and you die five years after buying the policy, then it will pay out the agreed income for the next 15 years. How much the policy pays out in total depends on if, and when, you die - so the cover is less expensive than regular life insurance that pays out a pre-agreed amount whether you die on the first or last day of the policy’s term.
Our menu-based approach lets you pick and choose from the various types of protection cover we offer to create something that’s unique to you. Structuring the policy in this way also makes it possible to take advantage of the multi-benefit discounts we offer - making sure you get the best possible value.
Although you might think you have an idea of what you need and a clear sense of what you might already have in place, it is imperative that you speak to a financial adviser. They will be able to look at your finances, as a whole, and help you find a policy that matches your individual needs and budget.
It’s certainly not enjoyable to dwell on the nasty surprises that might lurk around the corner, but protection cover will limit their financial impact on you and your loved ones and is available for less than you might think.