It is likely that we all know people — friends, family members or colleagues — who have fallen ill, had serious accidents or died suddenly. Even when you’re young and healthy, the chances of these things happening to you are more likely than you might think. According to a recent study, over 35% of critical illness claims were paid to people aged 40 or younger.
Losing a family member through accident or ill health can cause enormous financial problems but the implications do not stop there. The truth is that we all have a lot more to lose than we imagine so it’s worth asking yourself what needs protecting in your life.
We all understand the need to insure the breadwinner but what about the stay-at-home parent? Their contribution to the family is often overlooked but their loss through illness or death could have great cost financially as well as emotionally. A recent study estimated that it would cost approximately £32,000 to employ someone to replace the average stay-at-home parent.
It is easy to think financial protection is just for people with family responsibilities but a critical illness can hit anyone — even the young and single — and the last thing you need when you’re ill is money worries.
If you do find yourself too ill to work for any length of time, that could mean struggling to cope with day-to-day expenses like rent or mortgage payments, utility bills and groceries. It is not surprising that critically ill people also suffer money problems. A survey of cancer patients showed that as many as 91% of them were struggling for cash.
The good news is that more and more people survive critical illnesses but that still leaves the problem of coping financially until you’re back on your feet. Critical Illness Cover or Income Protection buys you the time you need to recover, making sure the only thing you have to worry about is getting better.
If you're too ill to work, it is likely that you will get sick pay from your employer but there is often a limit on the length of time this will last. Although you may be eligible for state benefits, Statutory Sick Pay is only enough to fill up an average family car.
Statutory Sick Pay currently stands at £89.35 per week and lasts for only 28 weeks, employment support allowance is even less at just £73 a week. When you think that the average household spend is £474 a week and that it costs £10,382 a year to raise a child, it’s easy to see how your lifestyle could soon come under threat. Family holidays, trips to the cinema and even after-school clubs for the kids would soon become a thing of the past.
Worse still, with the average family owing £13,200 on top of their mortgage, debts could start mounting up making life even more difficult.
A well put together protection plan not only considers big financial commitments like your mortgage but your monthly lifestyle costs as well. At Advanced Asset Consultants we will help pick out the right cover so if the worst ever happens, you will know that your debts are taken care of and that day-to-day expenses will not turn into big financial decisions.
Friday November 02, 2018
“A goal properly set is halfway reached”. Zig Ziglar The key to building wealth Our life is an endless series of daily choices, and how we manage those choices determines the outcome of our life. We all want financial freedom, but how will we achieve it? Financial goal-setting is the key to building wealth. There …
Saturday June 30, 2018
Traditionally when retiring an annuity was purchased providing income throughout life providing longevity protection with over 700,000 pension holders accessing their pots, 17% of which have purchased some form of an annuity, not that surprising I hear you say. However, annuities purchased from existing providers (clients not using open market option) are still hovering around …
Monday April 30, 2018
There has been much discussion within the financial advice sector on the term “insistent client” ever more so with regards to Defined Benefits transfers and how this should be approached. Let me nail my colours to the mast from the outset. There is no place for “Insistent client” within the Financial Planning Profession for the …
Monday March 19, 2018
Don’t let global uncertainties affect your financial planning for the years ahead. The overall direction of developed stock markets is a relentless and continual rise in value over the very long term, punctuated by falls. It’s important not to let global uncertainties affect your financial planning for the years ahead. Individuals who stop their investment …
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