Ensure you've cover in place to make your family safe
WITH Covid and other matters around the world, we have all been reminded of our own mortality in the last few years.
It would therefore be remiss of me not to remind you how to take care of your loved ones, if anything were to happen to you.
Which brings us to family protection insurances.
The two main types are life insurance and critical illness insurance, also known as CI.
Life cover is the most well known and best understood insurance. It pays out to your family when you die, making sure that they do not suffer from the loss of your income. Life insurance is a very simple insurance, because the underwriters (they are the ones who decide what your premiums will be) are fairly certain that, one day, they will have to pay out.
Life cover has become cheaper in recent years.
Both life and CI have several variations and types, CI is particularly complicated because the insurance company needs to know about your health.
If you tell fibs when applying, it could jeopardise your chances of a payout. They don't check your medical records when you are taking out the policy, but they do request your GP to let them see them if you claim. It is always best to take advice on critical illness insurance.
You have to tell them if your parents had any health conditions. If your father had a mild heart attack, for instance, they would want to know. Particularly if you are a man, that can be hereditary, although you tend to inherit medical conditions from mum.
Critical Illness pays out if you have to stop work when hit by a serious health setback.
It covers the main conditions of cancer, heart attack, stroke, MS, and major surgery, but covers many other conditions as well, depending on the policy. Again, it's well worth asking for financial advice on the various types.
You can set either your life insurance or your critical illness insurance to pay off the mortgage for your family, another way of taking the financial burden off their shoulders when you were unkind enough to pop your clogs without even asking permission.
Here is some idea of how likely you are to need CI.
Macmillan Cancer Support says there are 363,000 new cases of cancer in the UK every year. That's one new diagnosis every five minutes. Their research shows that if you get cancer, it adds £570 a month to your household bills.
Strokes are very common too. There's one every five to 10 minutes, over 100,000 a year.
As for heart problems, in a UK population of nearly 67 million there are 1.5m men and 850,000 women living with coronary heart disease.
Someone is taken to hospital with a heart attack every five minutes. The good news is that, due to medical advances, seven out of 10 of us will now survive a heart attack, compared to just three out of ten fifty years ago.
That makes critical illness insurance even more essential than life insurance.
Time to pick up the phone and make your family safe?
:: Michael Kennedy is an independent financial adviser and pensions specialist and can be contacted on 028 71886005. Further information on Facebook at Kennedy Independent Financial Advice Ltd or at www.mkennedyfinancial.com