Are You Covered? Reasons why you should consider buying protection products such as Life Insurance, Critical Illness and Income Protection

Local independent financial adviser from Shropshire, Steve Embrey examines the results of recent survey and looks at why cover counts:

Recent research by Royal London into consumer perception of protection products has revealed that almost half of 2000 consumers surveyed (47%) believed that life insurance is essential for anyone with a mortgage or dependants.

A quarter of UK adults surveyed have a life insurance policy (26%), however, just 6% have critical illness cover and 4% have income protection. Unsurprisingly, those with children under 18 are more likely to have all types of cover than those without.

Life cover is the most commonly owned protection cover of those surveyed with just over one quarter (26%) owning some, People aged 18-34 are the least likely to have life cover with just 17% saying they had a life cover product. However, the figure increases to 29% and 30% for the 35-54 and 55 plus age groups.

These figures are low, but appear to echo the sentiment that people don’t believe they need life insurance.

Many of the younger age group do not believe they need life cover.

When it comes to income protection, overall just 4% of adults owned an income protection policy compared to 26% with life insurance.

Every year 1 million workers in the UK find themselves unable to work because of illness or injury* and when you consider that state welfare benefits are only likely to be in the region of £70 to £100 a week (if you are even eligible) then you can see that it is important to consider how you would cope should disaster strike.

Should the worst happen, critical illness cover provides a tax-free ‘lump sum’ – one off payment that can help pay your bills, debts or even pay for alterations to your home such as wheelchair access should your condition require this.

Critical illness insurance will pay out if you get one of the specific medical conditions or injuries included in the policy. Be aware that not all conditions are covered and the policy will also state how serious the condition must be.

Examples of critical illnesses that may be covered include: heart attacks, strokes, certain types and stages of cancer, some conditions such as multiple sclerosis. Most policies will also consider permanent disabilities as a result of injury or illness.

The policy will pay out only once and some will make a smaller payment for less severe conditions.

It is unlikely to cover you for any health problems that you knew you had before you took out the insurance and this cover does not pay out if you die.

How much does it cost?

Your monthly payments will depend on a number of factors – your age, whether you are a smoker, your current health, your weight and your family medical history, your occupation as some jobs carry a higher risk than others and finally, the amount of cover you require.

As with most things in life, you get what you pay for, so better policies will charge a higher premium than poor quality ones with a large number of exclusions. Do check the small print carefully and read through what conditions are covered. An independent financial adviser can guide you through the policy details and find a level of cover that is right for your needs.

For more information contact Steve Embrey on 01743 282222 or email steven.embrey@pifinancial.co.uk, we can compare quotes and different scenarios for each client and can complete business for all types of clients throughout the UK including business protection plans.