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The new Reaching Resilience report from insurer LV= has revealed the gaps present in many people’s strategies for protecting themselves against the adverse financial consequences of illness or injury.
When asked how they would cover outgoings if they were unable to work for two months or more, the most popular answer, given by 47% of survey respondents, was that they would rely on savings or rainy day emergency funds. Just how realistic this is for many people was called into question by a separate finding that only 42% of households could manage for more than three months without an income. One in ten people said they had no savings at all and around 25% had less than 1,000 put by for an emergency fund.
12% of employed people and as many as 19% of the self-employed said they would continue working through their illness or injury, despite the fact that this may be impossible if the problem is severe and/or causes then person to spend a period in hospital.
The average working person’s income supports three people, according to the survey. Some respondents even classed their pets as people dependent on their income, although most mentioned needing to support their partner, children or other relatives, as well as ex-partners and their children. Two-thirds of the working population also have some form of debt, and of course lenders would expect debt repayments to continue if the person was absent from work.
Taking out protection policies in advance can very much help to alleviate any concerns in this area. The survey found that, while 52% of UK workers have some form of protection policy, only 27% have income protection insurance and only 29% have critical illness insurance.
Life insurance is something you should very much be considering from the start of your adult life, especially if you have children, or a mortgage, or you earn more than your partner.
Income protection – which pays a replacement income should you be unable to work due to accident or sickness – is something you need to consider taking out as soon as you are in employment. What would the consequences be were you to cease receiving a wage and be forced to reply on the very limited state support?
Critical illness insurance might also be appropriate for adults of any age – after all you can be diagnosed with a serious illness at any age, no matter how young and healthy you might feel. This type of insurance is often taken out to protect a mortgage, and ensure the balance is paid off were you to be diagnosed with a critical illness. It is important to note, however, that critical illness can be a useful way of ensuring that you (and any children) can receive a lump sum to pay for medical treatment or nursing costs, or for the necessary modifications to your home to adapt to your condition.
If you would like to find out more, then contact Moneysworth today to see how we can help.
According to a study by Direct Line, only 35% of UK adults have any life insurance at all.
Even if you are one of this 35%, it’s also important to ask yourself how much cover you might need, and whether you have made sufficient provision.
For many people, £200,000, or even £100,000, might sound like a lot of money, and many people might be reassured by having life insurance of this amount in force. When we look at all of the reasons why you might need life insurance, we begin to see that many people need a lot more than this:
Having £130,000 of life cover will not even cover the mortgage for the average UK homeowner, and that’s before we begin to consider the other need areas.
Inheritance tax is only paid on a small minority of UK estates, but if it might apply to you, and you don’t take out life insurance to cover it, your relatives could be left with no means of paying a large tax bill of 40% of the value of your estate.
Replacing the income of a breadwinner can also be an area where you might need a lot more life insurance than you imagined. There might be some reduction in the household expenses if there is one less person to buy for, and having mortgage life cover will remove the mortgage payments from the household expenditure, but the monthly outlay is still likely to be substantial. Think carefully about what salary you earn and how your partner and dependants might manage without this income coming in.
Life insurance might be required to cover your income until such time as your children reach their early 20s. It might be required for even longer if you earn significantly more than your partner and they rely on your income.
If you earn £40,000 per year, you might need cover for at least half of this. If your children are likely to be dependant for another 20 years, this could mean there is a need for at least £400,000 of cover, and potentially more if you have a mortgage and/or an estate where inheritance tax might be charged.
If you earn a good salary, and had previously thought £200,000 of life insurance would be sufficient, ask yourself this question – Would you be willing to give up your salary for the rest of your working life, in exchange for a £200,000 one-off lump sum?
Here at Moneysworth, we would be delighted to hear from you if you want to take out life insurance for the first time, or if you think your life insurance provision might be insufficient. Our team of experienced protection advisers will carry out a comprehensive assessment of your circumstances and make a recommendation as to how much life insurance you really need.
Our particular specialism is arranging life insurance for people with all manner of different health conditions, who may find it difficult to get covered if they tried to arrange it themselves.We have won numerous financial services industry awards and our clients regularly give us superb feedback, so you really are in safe hands if you give Moneysworth a call.
Moneysworth is delighted to have been shortlisted once again in three categories at the 2024 COVER Magazine Excellence Awards.
These awards recognise the very best firms across the UK insurance sector. We have been shortlisted in the same categories as last year:
We won the Small Intermediary award last year and are looking to make it three wins in five years in this category, and four wins in six years if you count our 2019 victory in the Specialist Intermediary category.
Our nomination in the Specialist Intermediary category reflects the specialist service we provide to clients who may find it difficult to obtain life insurance, critical illness insurance or income protection insurance elsewhere.
We were also delighted to be shortlisted for the Client Engagement award once again, as this reflects how we always put the clients; interests first, something which is more important than ever following the introduction of Consumer Duty last year.
We were also delighted to receive this endorsement as further recognition of the positive outcomes our clients receive, which complements the superb feedback they give us on a regular basis. We were also delighted to receive the Feefo Platinum Service Award earlier this year.
We were fortunate to win one of these awards in 2023 and hope for further success at the ceremony in October.
Health & Protection is a leading publication for intermediaries, consultants and brokers in the world of healthcare, protection and financial advice.
Above all, these successes are testament to the efforts of our directors, advisers and administrators, and a fantastic acknowledgement of the quality of service we provide to our clients.
Both our clients and the industry experts have recognised that we offer the highest levels of advice and customer service, so if you are a consumer seeking life insurance, critical illness insurance or income protection insurance, get in touch with us today. If you work for a financial services firm, then you can rest assured that your clients will be in safe hands if you introduce them to Moneysworth, so please contact us to find out more about what we can offer.
You may be aware of the Consumer Duty, which was introduced by our regulator, the Financial Conduct Authority (FCA), on 31st July 2023.
The Consumer Duty places new obligations on financial services firms to take positive actions to ensure they deliver good outcomes for their clients.
Moneysworth wholeheartedly welcomed the introduction of the Duty. We have always been aware of the importance of treating customers fairly.
We have trained all of our advisers on our expectations of them when servicing clients, and all of our advisers undertake regular ongoing training to ensure they remain up-to-date with developments in our industry. We carry out ongoing internal monitoring of the quality of advice we provide.
All of our suitability letters also include a link to the Jargon Buster page of our website. We recognise that financial services terminology can sometimes be confusing. While we endeavour to ensure all of our own communications are free from jargon, we have developed this guide to help you understand the terms you might hear being used by an insurance provider, or by anyone else.
Life insurance is something you should very much be considering from the start of your adult life, especially if you have children, or a mortgage, or you earn more than your partner.
Income protection – which pays a replacement income should you be unable to work due to accident or sickness – is something you need to consider taking out as soon as you are in employment. What would the consequences be were you to cease receiving a wage and be forced to reply on the very limited state support?
Critical illness insurance might also be appropriate for adults of any age – after all you can be diagnosed with a serious illness at any age, no matter how young and healthy you might feel. This type of insurance is often taken out to protect a mortgage, and ensure the balance is paid off were you to be diagnosed with a critical illness. It is important to note, however, that critical illness can be a useful way of ensuring that you (and any children) can receive a lump sum to pay for medical treatment or nursing costs, or for the necessary modifications to your home to adapt to your condition.
Perhaps the best reason for taking out life insurance, critical illness insurance or income protection insurance at an early stage in your adult life is that your premiums will be much cheaper than would be the case at an older age.
If you would like to find out more, then contact Moneysworth today to see how we can help.
The British Heart Foundation says that 7.6 million people in the UK are living with some form of heart condition. Whilst there are still unfortunately a number of deaths from heart-related issues, deaths due to heart issues are falling.
So what does this mean for people with a heart condition who want to take out life insurance?
An insurer is likely to regard your heart condition as an additional risk factor when assessing an application. The good news, however, is that there are insurance companies who will consider people with heart issues. There are clear benefits though to arranging your life insurance with a specialist broker such as Moneysworth.
If you have been declined by one or more insurers because of your previous heart trouble, or you have been told by another broker that your health issues mean you cannot get life insurance, then contact Moneysworth today. We have often been successful in obtaining policies for clients who have been declined elsewhere.
Having a heart condition need not necessarily mean that you have experienced a heart attack in the past. We can also assist clients who have experienced:
Moneysworth’s highly skilled and experienced team are experts in assisting people with many different mental and physical health conditions to obtain the cover that they need.
Recent examples of where we have been able to obtain cover for clients with heart issues include:
58-year-old man who had experienced a heart attack
29-year-old woman with transposed arteries and stenosis
47-year-old man with Essential Thrombosytheria
33-year-old woman who had undergone a valve replacement
44-year-old man who had undergone surgery on two occasions
These cases illustrate that it can still be possible to obtain life insurance where:
If you would like to find out more, then contact Moneysworth today!
