Why reviewing your financial protection needs can be essential, no matter the time of year

Financial News

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December likely isn’t the time you want to think about serious matters such as illness or death. Instead, there’s a good chance you want to celebrate the holiday period with your loved ones.

However, reviewing your protection needs is still crucial regardless of the time of year. By doing so, you’re ensuring that you and your family would be supported should the unthinkable occur. 

Despite the importance of protection, not everyone has it in place – Cover Magazine reveals that 72% of over-50s don’t have life cover, representing around 20 million people in the UK. 

Continue reading to discover why protection is so essential, no matter the time of year, and how it could support you and your loved ones through a period of hardship. 

Financial protection can help you focus on and work towards your long-term goals

Over the course of your life, you’ll likely work hard to accumulate wealth and reach any long-term financial goals you may have. 

However, if some unexpected life event occurs, such as a severe illness or injury, this could derail your progress towards these goals if you need to use your savings to make ends meet.

Even if you have an emergency fund in place, it may not last forever. Also, while you can make the most of up to 28 weeks of Statutory Sick Pay if you’re too ill to work, you can only claim a maximum of £109.40 a week as of 2023/24.

This is where financial protection comes in, namely:

  • Critical illness cover
  • Income protection
  • Life cover 

Critical illness cover is designed to give you the peace of mind that you’ll be financially supported if you’re diagnosed with a serious illness that’s covered by your provider.

Similarly, income protection provides you with a regular source of income if you’re unable to work due to an accident, illness, or redundancy. While they may sound almost identical, it may be worth having both income protection and critical illness cover in place, as they complement each other well. 

For instance, if a serious condition prevented you from working, you could use the lump sum from your critical illness cover to cover any essential costs, such as mortgage repayments, while the regular funds from income protection could help you pay your day-to-day expenses.

Of course, income protection and critical illness cover are just two parts of an overall package of protection you may want to consider. It may also be worth reviewing your life cover needs. 

This will provide your loved ones with a lump sum of money after you pass away, helping ensure that your family will be able to maintain their standard of living at a time when they’re likely grieving. 

Note that plans may not cover all the definitions of a critical illness. The definitions vary between product providers and will be described within the Key Features and policy documentation if you proceed with the plan.

Having adequate cover in place can give your mental wellbeing a much-needed boost

As well as providing you and your loved ones with a much-needed financial safety net to protect yourselves against the unthinkable, protection can also boost your mental wellbeing.

Indeed, if you don’t have much money saved away, or lack an emergency fund to support yourself through periods of hardship, this could be an immense source of stress and anxiety. 

Moreover, if you fall ill and are unable to work, you may not be able to keep up with any essential bill payments, and your credit score could drop, further deteriorating your mental health.

Meanwhile, financial protection could help you rest assured that you and your loved ones would be supported if you cannot work. This could lift a weight from your mind and relieve any feelings of worry you have for the future. 

Or, if you’re concerned about passing away and leaving your family without financial support, life cover can give you the peace of mind of knowing that they’ll be looked after if you die suddenly. 

Protection can come with additional benefits

Aside from the more apparent advantages of financial protection, your cover could also come with several other unexpected, yet welcome, benefits that could help you in your day-to-day life. 

For example, some protection providers offer discounts on gym memberships. This could help you reduce your monthly costs, all while staying fit and healthy. 

Some providers even offer mental health support, giving you the chance to speak to a counsellor to discuss and relieve any feelings of stress and anxiety you’re experiencing. Alongside the reassurance that protection offers, this support could help boost your mental wellbeing even further. 

If you’d like to protect your children from any eventuality, some providers even offer free cover for your younger loved ones. 

While it can be distressing to think about your child developing a serious illness, having their own free cover could be comforting as you can use any payouts to fund private treatment, ensuring they get the best support available. 

Get in touch

If you’re unsure of your protection needs and would like some reassurance that you’ll be supported during periods of hardship, then we can help. 

Please contact us via email at info@investmentsense.co.uk or call 0115 933 8433 to find out more.

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. Cover is subject to terms and conditions and may have exclusions.