Updated: Oct 26, 2022
Life is full of many surprises; some good, some bad. We never truly know what is around the corner.
If you would have said to someone at the end of 2019 that the world would have come to a grinding halt due to a deadly virus, Russia would launch a full-scale war on Ukraine and the England football team would come within a penalty shoot-out away from winning the European Championships, they may have thought you were living on a different planet.
But that is life. Anything can – and probably will – happen. It can make a mockery of our plans.
This is particularly pertinent when it comes to health. Serious illness is usually life-changing and can throw up all sorts of complications.
When faced with such a crisis, it is crucial not to lose sight of financial issues as neglecting them will only lead to further problems down the road.
At Reeves Independent, we always empathise that any material change in circumstance should prompt a close look at your financial plans.
Kate was a self-employed hairdresser, having been in the business for over 20 years. She was the main earner for her family, which comprised her husband Peter and her two teenage children.
If Kate fell ill, the family would be in hardship as Peter’s income from his part-time job wouldn’t be enough to cover their bills.
With this in mind, Kate realised she needed to protect her family. She got in touch with Reeves Independent for some guidance on what she could do. With over 25 years in financial services, Reeves was well placed to help Kate make the best choices for her and her family.
After chatting to an FCA registered adviser, Kate set up an income protection policy.
According to LV, since the COVID-19 pandemic, 8,000,000 uninsured adults aged between 25 and 44 are now considering income protection. Despite that, 19% of 25–44-year-olds without this cover say they have never heard of income protection insurance, with 14% unaware of life assurance.
Don’t be one of those people who think they are too young to protect their income and family. Illness and death can occur at any time, so make sure you are protected.
Family income benefit can pay out a regular monthly income. The maximum cover for income protection is around 55-60% of earnings, but this is tax-free which is a boost. For a large section of workers, it is not only feasible to pay less for an extended period of cover by taking out a policy at a younger age, but also means the plan is less likely to contain exclusions.
Ask yourself, if you became ill, would the statutory sick pay be enough to cover the bills for your family?
At just £96.35 a week, this is most likely to be lower than your usual salary. In this event, you may want to consider an income protection policy so that you can continue to pay your bills in the event of an accident or illness.
Income protection triggers if you become sick and you can’t do your job. You may think this won’t ever happen to you, but Kate was relieved she took the policy out. Kate was involved in a car accident, sadly resulting in a head injury. She lost the capacity to work and, as such, her family lost their main source of income.
Fortunately, Kate had the foresight that something nasty could happen at any point and the income protection policy she took out started to pay an income – the family had money to live on.
Whilst we potter on with life, it is natural to not want to think about disaster, illness and death. But by taking some time to take adequate income protection insurance and life insurance policies, we can make sure our families are protected should the worst happen.
Reeves Independent can help make sure you and your family can have a brighter future.