3 powerful reasons why we recommend protection as part of your financial plan
Without the help of a crystal ball, you can never know what the future has in store.
If you look back over the course of your lifetime so far, you can likely pinpoint events that occurred without warning.
These can be positive events, like meeting your future spouse or getting your dream job – but they can also be negative, such as the passing of a loved one.
One example we can all relate to in today’s world is the Covid-19 pandemic. There was no warning that our lives might be turned upside down unexpectedly in 2020; we simply had to adapt as best we could when the situation presented itself.
Although you can’t predict the future, you can say with some certainty that life will continue to throw curveballs your way. You can’t always be emotionally prepared for these events, but luckily, you can prepare your wealth to shoulder an unexpected blow if one occurs.
Indeed, if you want to reach your financial goals and grow your wealth through careful saving and investment, it’s important to make sure nothing unexpected derails those plans.
So, here are three powerful reasons why we recommend protection as part of your financial plan.
1. You can overcome difficult periods without using up your hard-earned savings
It isn’t easy to consider, but have you ever wondered how your family would cope financially if you were to pass away suddenly, or became too ill to work?
Many of us like to think “it’ll never happen to me”, but unfortunately, nobody is invincible.
According to Money Marketing, UK insurer Aviva paid out more than £16 million in testicular and prostate cancer critical illness claims in 2020 alone. You may be surprised to learn that, of those making successful claims, 87% were under 50, and 9% were under 40 years old.
If you were to become seriously ill, or even pass away, your family might be without an income for a time – meaning your savings may become quickly depleted if you don’t have protection in place.
Although you can’t always control an unexpected event, such as becoming seriously ill, you can control how you protect your wealth before it happens. Protection options like life insurance and critical illness cover can help shore up your wealth against the unexpected.
With a life insurance or critical illness cover payout, your family could:
- Continue to pay your mortgage, meaning they could remain in your family home
- Focus on their health and wellbeing in a time of stress, rather than financial worries
- Maintain a substantial savings pot instead of depleting your hard-earned wealth.
If you are searching for a way to protect your savings from unexpected events, speak to your financial planner about protection options.
2. With protection in place, you can grasp opportunities with greater confidence
One of the most common myths of financial protection is that it may sound good on the surface but the providers always find an excuse to avoid paying out. Thankfully, when you check the data, you’ll find this couldn’t be further from the truth.
According to the Association of British Insurers (ABI), a record number of claims were paid in 2021, with 98% of claims accepted across individual and group insurance policies.
Additionally, the ABI states that of the 2% of claims not accepted, most were “non-disclosure” cases – meaning the policy holder did not reveal conditions that might have affected their claim.
When you understand that statistically, your claim is highly likely to be successful, you might feel more confident to invest in protection for you and your loved ones.
3. It can help you to keep your future plans on track
One of the biggest benefits of finding the right financial protection for your needs is that, whatever the future may hold, it can help to keep your plans on track.
If you fell ill with a serious illness and had to take an extended period of time off work to recover, it could seriously affect your finances. Not only might you need to dip into your savings if you weren’t earning, as we mentioned earlier, but you may also have to halt your pension contributions.
This can be a serious problem and could lead to you not having enough wealth in retirement. Since missed contributions would have had many years to grow, they can have a large impact down the line.
This is where Critical Illness Cover can help, as it would allow you to keep paying into your pension fund if you needed to take time off work to recover. This can ensure that you don’t need to take a break in your monthly contributions, and so have enough wealth when you retire.
Having the right type of protection in place can give you confidence to know that illness won’t affect your progress towards your life goals.
Financial protection is an important part of creating long-term security. We have created a guide which highlights the importance of understanding the different types of financial protection available and how they could fit into your financial plan to give you peace of mind. Download ‘Your complete guide to financial protection’ here.
Get in touch
To discuss a bespoke package of protections that work for you and your loved ones, email us at firstname.lastname@example.org or call us on 0330 332 7866 to speak to one of our team.
Note that life insurance 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.