Which insurance policy?
Be it life assurance, serious illness cover, income protection, medical protection or cover for old age in the form of long term care insurance - we all need to consider our protection needs.
Guidance: In this section we have given some ideas as to the sorts of policy that different people should consider depending upon their circumstances.
In addition, for each type of policy we have given examples of whom it may be suitable for.
For more advice on which policy is good for you contact our advisers and we will search for the best policy for you.
1. Life Assurance
The need for life cover will vary according to a person's marital status and whether or not they have children or other people to support (called dependants because they are dependant on you and would suffer financially if you were to die).
For your spouse, cover may be needed for the rest of your lives but what about when your children have grown up and have lives of their own?
Different people may also have different needs for lump sums of money or income to be provided.
People can generally be split into three categories - please select the one most relevant to you.
Married People and Civil partners With Or Without Children Or Dependants
For a couple with dependants (i.e. children) it is likely that at least one of the partners will be the main earner. It is important for that person to have enough life cover in the event of death.
This would mean that bills and other payments could still be paid.
Money Making Machine
If somebody gave you a Money Making Machine that churned out of it's funnel £1,000 a month, every month for the next 30 years would you insure it against loss or damage? You probably would.
That is exactly what a person is, have you arranged adequate insurance cover?
If both people work, each of them should have enough cover so that the lifestyle of the family could be maintained. This would mean that a nanny or housekeeper could be paid for whilst the remaining spouse continued to work.
What if your partner stays at home?
How much would it cost to get help for child care, a cleaner etc if you lost your partner? Or your partner was taken seriously ill and you needed to stay at home to take care of your partner. Would that put a strain on the finances?
Broadly speaking, if you have dependents, either partners or children, you should ensure adequate protection across all areas.
Preferable if you can afford:
Single Parents With or Without Other Dependants
A single parent with children to support will need life cover to ensure that the children are provided for in the event of the parent's death. If the single parent has other dependants, extra cover may also be needed.
Divorced or Separated:
In the case of the divorced single parent, it may be that the children are being provided for through maintenance payments from a former partner.
If this is the case, what would happen if the person paying the maintenance died? What would happen if the children died?
These are depressing thoughts - but are serious and you have to consider them.
If you are the payer of maintenance to support your children, how will they cope if you are not there to provide for them?
If you receive maintenance, how will you cope financially if your former partner dies and your income reduces?
How will you cope if your children died and your former partner reduces or stops making payments? Serious consideration needs to be given to ensure financial well being.
Life cover should therefore be considered for yourself, your former partner or indeed on your children’s lives to ensure financial security.
Preferable if you can afford:
I do not care, I am single..................
If you are a single person and have no dependants, you may still need life cover.
If you intend to marry in the near future or may need life cover for other future plans, there is a very strong argument for arranging cover as early as possible - as it is cheaper?
Being single still means having responsibilities and possibly needing cover.
For a single person with dependants (who may be elderly relatives), life cover may be required to ensure that the dependant can be looked after in the event of the single person's death.
In general, shorter term needs can be provided for using Term Assurances and longer term needs can be provided for using Whole Of Life policies.
Preferable if you can afford (or if you need it e.g. debts):
2. Serious Illness Cover
Protect Yourself Against Serious Illness.
Serious illness cover is sometimes referred to as 'critical illness' or 'dread disease' cover because it is designed to pay out a lump sum of money when a person is diagnosed as suffering from a specified disease.
There are four main killer diseases that are usually covered under policies. These are:
Some or all of the following may be covered:
The effect of a serious illness - the onset of a critical illness can seriously affect a person's everyday life.
They may need to:
Serious illness cover is important for the majority of people - it doesn't matter whether you are married or not or whether you have children.
You are 22 times more likely to be off sick for six months or more than to die before age 65.
Critical Illness Protection can be very important for people who work and support themselves financially, regardless of whether or not they are married.
3. Income Protection
Protecting Your Income Against Illness
If you were off sick from work for a long period who would pay your bills?
If you had an accident and could not work for a long period who would pay your bills?
Being off work for a long time, whether through sickness or accident, can cause even greater financial problems than if you were to die.
This is because you will have to provide for yourself and maybe your dependants.
Sickness cover (which is known as income protection) can be very important for people who work and support themselves financially, regardless of whether or not they are married.
4. Medical Insurance Protection
Having to wait for a non urgent hospital operation or outpatient treatment can severely disrupt your private and working life.
Private medical treatment can take the delays away but the costs are likely to be high unless you have cover in place.
This type of cover is likely to be beneficial to all types of people, regardless of whether they are married or not. It is designed to provide the money when an operation or treatment is required so that you can afford to have it done privately.
Preferable if you can afford:
5. Long Term Care Insurance: Protection and Insurance Advice
The subject of Long Term Care, whether in a residential care home or care at home is complex.
Did you know if you cannot afford to pay for care, that your homes value will be taken into account?
For this reason and many others, we have a dedicated web site for you to visit.
Making provision for care in old age is important for people of all ages. You should not dismiss this subject just because you are in your 30's, 40's or 50's.