Protection - What’s the Point?!

This a topic of debate, that comes up for every home buyer, remortgager, couple getting married, first time parents, mates down the pub on a Friday night, you name the scenario and most likely people with have a different opinion on the need for protection.

It’s like marmite - some love and see the real value in it. Other’s hate it and think it’s a waste of money.

Now, it’s probably a good starting place to explain what I mean by “protection”.

No, I’m not talking about PPE, suncream or putting your seat belt on. By protection I mean insurance. More specifically life insurance.

Now insurance isn’t just that of the life variety.

There are a few different types that you can have:

• Life insurance

• Critical Illness Cover

• Income Protection

• Family Income Benefit

• Whole of Life Cover

So, what is it?

The insurances listed above are all designed to cover you in the worst case scenario - of you passing away, you getting critically ill, or you being off sick from work for an extended period of time.

Why do you need it?

Well, the honest answer is you don’t. There is no legal obligation anywhere for you to have to take out any of these covers. It’s not like car insurance, you can go your whole life without ever taking out a policy… but then, what if…?

What if, the worst thing possible happens and you or your partner isn’t there anymore?

What if, you go to the doctors for that routine check up and you get given the worst possible news that you could never have imagined?

What if, that injury, or illness that you thought you would bounce back from quickly because you’re fit and healthy, all of a sudden takes months and months to disappear, but your work stopped paying you after a week?

The list of what if’s can go on for pages and pages, but the sad reality is some people do still believe there isn’t a need for protection. They believe in an invincibility that they have, or have the “it’ll never happen to me” mindset. Well, my question to those people…

You’ve got your car insured right?

You’ve got your house insured right?

You’ve got your dog/cat insured… right?

Then why on earth would you not protect the most important thing? YOU. The one that pays for all of those other things, puts food on the table, pays the other bills you have in life? Without you, none of these things are covered, and this could be the difference between you keeping your home, or losing it.

Now like everything in life, insurance comes at a cost. Which in all honesty is the thing that puts a lot of people off of having it. The thing with insurance, it’s like a mortgage. There isn’t a one size fits all approach to it. So many factors have to be a taken into consideration when arranging a policy:

• Age of the person being insured

• How much they are being covered for (sum assured)

• Health history

• BMI

• How long the cover is over (Term)

• Whether the cover is Level or Decreasing

• Comprehension of the cover

As you can see, there are a lot of factors to consider. So, that mate down the pub who’s telling you they only pay £5 a month for their insurance, when you’re paying £50 and that you should get rid of it…. Well I would go back to them and ask:

How much are they covered for?

Is it just life cover or is it critical illness cover as well?

How long is left on the cover?

Who’s the cover with?

If all of these answers for that person aren’t exactly the same as yours would be, well then that’s why there is a difference in price.

The conversation for insurance can go on for hours, but the key is to speak with an experienced adviser who can explain what your options are, and how to best cover you for that “What if?” moment.

Consider budget, and consider what is most important for you.

You don’t just have to protect your mortgage, you can take insurance out for a multitude of different scenarios. But having the right conversation to understand what is important to you, is the perfect way to start.

If you’re going to cover your pet, why wouldn’t you cover yourself?