A great many adults in the UK have dependents – meaning people that rely on them financially – with this figure estimated to be more than a million. If you are someone who has children or elderly relatives to support, it will be vital to safeguard your income in the event of serious injury, illness or death. Here, we will look at the importance of financial protection.
What is protection?
The term ‘financial protection’ essentially refers to the different types of insurance policies that you can take out to ensure that your family is not left with nothing if you are no longer able to work and earn. If you are a fit and generally healthy person, it can be very tempting to view paying out for this as an unnecessary expense, but that is a risky view to take.
There are a number of serious and life-threatening illnesses that can afflict previously healthy people at any age. Equally, it is possible for anyone to suffer an accident that renders them unable to continue doing their job.
That element of risk is an unavoidable part of life, and it is why any responsible financial advisor in Chester or anywhere else will always look at what protection a client already has and suggest options for areas where they are not covered.
What types of financial protection are there?
There are several forms of insurance that come under this heading, including:
This sort of policy is designed to ensure that any dependents you have will receive a lump sum payment if you die. It is important in providing an immediate financial cushion for them in that painful situation.
This is also frequently referred to as permanent health insurance. It will offer long-term protection to you and your family if either injury or illness leaves you unable to work by paying out monthly what you were earning while working.
Critical illness insurance
This type of insurance offers financial protection in the form of a single payment if you are diagnosed with one of a range of serious illnesses. Examples of these are multiple sclerosis, a stroke, a heart attack and some forms of cancer. It can be invaluable if you have mortgage commitments to meet.
In short, the importance of financial protection is in ensuring that your family is not left facing the stress of financial crisis on top of the strain and grief they would experience if you were to die or suffer serious injury or illness. To learn more, speak to our team at Hartey Wealth Management.