The bank of mum and dad
Without question, being a parent has made me realise that I am not the most important person in my life. Giving my kids security and the hope of a bright future is what gets me out of bed in the morning. I fight to succeed everyday so that my children can have a great life. But what if I suddenly wasn’t there or wasn’t able to provide for my family? I wouldn’t want my untimely death or an illness to scupper my daughters’ futures.
"You should consider utilising insurance to protect your families financial future."
Let’s bite the bullet and get the worst case scenario out of the way first. Death only affects those left behind. Despite being one of the only certainties in life, none of us really want to think about it. But come out of your comfort zone and face this fact now. When you die, your loved ones will be the people left behind. What would happen to your family if you suddenly died tomorrow? Would they cope? Would they be able to live out all of their hopes and dreams? Or would they struggle financially? Obviously, they would be affected from an emotional point of view, but how would it affect them financially?
Financial security, peace of mind, an inheritance or just certainty that bills can be paid, are all legacies we’d like to leave behind for our loved ones. A Life Insurance Policy can help to deliver all of these things, so it is a pivotal part of your financial planning strategy. How much you need will depend on your age, wealth and circumstances, but, generally speaking, as a good rule of thumb, you will probably need twenty-five times your income. Why so much? If you earn £20,000, a lump sum of £500,000 will generate a sustainable income of around £20,000 per annum for your loved ones.
The chances of you dropping down dead tomorrow are relatively small. It’s not impossible, and the impact could be huge on your family, but the chances are still slim. Sadly, it’s far more likely though that you could be diagnosed with a critical or even terminal illness.
According to ‘Contractor Weekly’, ‘a recent study has revealed that one in two people born after 1960 will be diagnosed with some form of cancer during their lifetime.’1 These are frightening figures, but those statistics don’t even take into account other life-threatening illnesses that could have a seriously detrimental effect on your finances.
If you are diagnosed with a critical illness, chances are that you would not be able to work for a significant period. If your salary sustains your family, can you image what this would do? They might not be able to pay the mortgage, meet household costs and would generally struggle to get by. Yes, you may be entitled to some form of statutory sick pay, but would this be enough? If you’re self-employed, this problem is compounded even further: If you don’t work, you don’t earn any money.
Many illnesses require specialist treatments, home modifications or professional care, all of which can be very expensive. Say for example that you needed to build a downstairs wet-room, as you could no longer use the stairs. The cost of this would run into the thousands, but would be necessary for you to continue to lead a comfortable standard of living. You may have money put aside to cover this expense, but would you really want to spend your long-term savings on this modification, when it was originally designed to generate your Financial Freedom?
The beauty of Critical Illness Cover is that the payout is tax free and you can spend it on what you need to, whether that is medical bills, your mortgage or home modifications . You are also free to invest the money, so you can build a passive income for your loved ones in the years to come. In other words, Critical Illness Cover will give you a lifeline at this demanding and difficult time. You won’t need to worry about the financial implications of your illness, instead be able to focus on getting better.