Now’s the time to protect yourself: critical illness cover, income protection and life insurance

Now’s the time to protect yourself: critical illness cover, income protection and life insurance

Over the past couple of months, life has changed dramatically.  For some, lockdown has meant juggling the 9-5 whilst home schooling little learners. But for others, the past eight weeks have forced us to put life on pause and shown us what we all value the most: our health and loved ones.

Which is exactly why there’s never been a better time to think about what type of financial protection you have should you die, become seriously ill or be unable to work.  We know these aren’t easy things to consider but getting insurance that financially protects you and your family can bring real peace of mind.

At Mortgage Confidence we primarily provide three type of cover – Life Insurance, Critical Illness, and Income Protection.  We recognise that this may not be the most exciting purchase you’ll ever make but it could be the most important.  We can talk you through the options that best suit your situation and budget.  But, in brief:

Life Insurance

Life insurance  is about ensuring your dependants have the money they would need if you were no longer around.

Essentially, should you die, life insurance protects your family from financial difficulty by issuing a lump sum or regular payments. It can help them deal with everyday money worries like bills, childcare costs, mortgage payments or rent.

The amount of money paid out depends on the level of cover you buy, which will be determined by the outgoings you want to cover.

When it comes to life insurance, there are two main types:

  • Term life insurance policies – run for a fixed period and only pay out if you die during the policy.
  • A whole-of-life policy – will pay out no matter when you die, provided you keep up your payments.

Starting a family can often prompt people to think about life insurance, but it’s also worth considering if you live with a partner who would struggle to pay the mortgage without you.

Critical Illness cover

Sadly, critical illness can strike at any time. In fact, recent reports state that one in two people in the UK will develop some form of cancer during their lives (Cancer Research, 2015), every seven minutes someone will have a heart attack and every 12 minutes someone will have a stroke (Heart UK, 2016).

Which is where Critical Illness Insurance, can help.  Basically, it’s a long-term insurance policy which pays out a tax-free lump sum if you are diagnosed with a serious illness.  Cover varies from policy to policy but generally includes cancer, heart attacks, strokes and so on.

This one-off payment could help pay for your mortgage, rent, debt or alterations to your home – such as wheelchair access – should you need it.

Plus, some policies can include children’s critical illness cover which helps to provide some additional peace of mind.

Income protection

According to the 2017 Legal and General study, ‘Deadline to Breadline’, the average UK employee has enough savings to last just 32 should they find themselves without work. Which isn’t very long at all!

This highlights how important Income Protection, could be if you were unexpectedly unable to work due to illness or accident. Formerly known as permanent health insurance, Income Protection usually pays out until retirement, death or upon your return to work. Although you can find some short-term income protection policies which last for one or two years.

Given that you are actually more likely to be off work due to long term illness than to die prematurely, this cover can provide great peace of mind should you find yourself unable to work.  And potentially well worth considering if you are self -employed or live alone and don’t have someone to share the bills with.

This type of protection doesn’t cover you if you’re made redundant but will replace your monthly income whilst you’re ill and provide specialist help to get you back to work.  So, you can spend more time getting better and less time worrying about your personal finances.  Put simply, Income Protection works when you can’t.

At Mortgage Confidence we don’t charge a fee for arranging protection insurance.  And what’s more, we offer a free 30-minute consultation (over the phone or videocall right now of course!) where we would be happy to chat though what financial protection might be most appropriate to your personal circumstances.  So why not get in touch today?  

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