The importance of financial protection in protecting you and your family
No one can be certain of what their future holds, all we can do is put plans in place to help us get the most from our lives. But no matter how good our plans are, life can sometimes get in the way. So, when things don’t go to plan, it’s important to have the right financial protection in place.
Although no one wants to think about becoming ill or dying, it is a part of life and it’s better to be financially prepared. If something was to happen, it’s important to know how you or your dependents would pay any essential bills, manage debt or generally cope financially without you. That’s where financial protection comes in.
For many people, when they think of financial planning, they usually think of their mortgage, pension or growing their savings. Financial protection can often be overlooked but it can help you protect and sustain your wealth so that you and your family are covered in the event of unforeseen circumstances.
There are also many other benefits of financial protection, including:
- minimising stress for your family and loved ones;
- providing peace of mind for you;
- making sure your debts are covered;
- helping you achieve your long-term goals;
- providing financial security; and
- help protecting what’s most important to you.
No matter what stage you are at in your life, whether you are buying your first house, starting a family or looking to support your retirement, protection should be a key part of your financial planning.
There are many different types of protection depending on your lifestyle and requirements, but the more common types are:
Life insurance – This pays out a lump sum on your death. The amount paid out depends on your personal circumstances, but many policies are set up to support loved ones or dependents with a mortgage should you pass away.
Income protection – If you are not able to work due to illness or an accident, income protection can provide you with a regular income until you are able to go back to work. This protection could be particularly beneficial for self-employed people who do not get company sick pay.
Critical illness insurance – Similar to income protection, critical illness can provide you with monetary support should you become too ill to work. However, instead of a regular income, critical illness is paid out as a lump sum.
Whole of life insurance – This is a type of insurance which will pay out a lump sum when you die, no matter what your age. The amount paid out will depend on the policy, but it can be used in inheritance tax planning and can also be linked to your investments.
Private medical insurance – Also known as PMI, this type of insurance can help you seek medical treatment, usually much faster than going through the NHS. This means, you can get better quicker and back to work sooner, so any loss of income is minimised.
These are just a few of the different types of financial protection available. Each one is different and will benefit different people in different ways. Like with most things financial, there is no one size fits all approach. So, finding the right protection for you, according to your circumstances, lifestyle and financial needs, is the most important part to making sure you and your family remain protected.
At Foster Denovo, we have a tailored approach and are passionate about working with you to help your ongoing financial journey. We can help make sure you have the right protection in place depending on your personal circumstances and needs. To discuss what type of financial protection is right for you and your priorities, please contact us today.
This article is for information purposes only and does not constitute advice or a personalised recommendation.
Foster Denovo Limited is authorised and regulated by the Financial Conduct Authority.
The Financial Conduct Authority does not regulate taxation and trust advice