Is Your Family Secure If You Get Sick?

It is shocking but true that one in three of us will suffer some form of cancer before the age of 65. Donna Bradshaw, director at Independent Financial Adviser (IFA) Fiona Price & Partners, says "That's why protection is imperative – those are not good odds,"
Life Assurance is the most popular cover taken out although it is debatable as to whether it is the most necessary. Life cover is vital if you have a spouse or dependants but not if you don’t as it pays out after your death. Some people think that they can’t afford to have Life Assurance but the real truth is that they cannot afford not to have it if they have a family to support and protect. RJ Temple reveals in a recent survey that 24 per cent of people with a family don’t know if they have Life Assurance or not and 20 per cent don’t have it.
Many employment packages include life cover but they are generally not enough to provide an income for a spouse with dependants and cover the mortgage too. A standard guideline is to insure yourself for 15 times your income.
Virgin Money’s research has revealed that over the last 15 years the average cost of Life Assurance has dropped 43Percent simply because people seem to be living longer due in part to medical advances allowing sick people to recover from illness that, at one time, they would most likely have died from. Those who already have life cover are possibly not aware of this fact and do not stand to gain anything unless a claim is made so do not need to feel that they have to stay with their existing policy holder – there may well be much better deals around now.
However, Critical Illness and Permanent Health insurance premiums are on the increase because people are surviving serious illness and making claims on these policies. They are still vital and should be budgeted for if possible especially if there are no dependants. The question that you have to ask yourself is can I afford not to have an income? For the majority of us the answer is no and everyone should have income protection.PHI pays out a tax-free income which is calculated on a percentage of your salary for ‘non-critical’ as well as critical illness and for the whole length of time that you don’t work.
Critical Illness cover will pay out a tax-free lump sum if you become potentially terminally ill which should help to alleviate financial stress or pay for any adaptations that may be required if your mobility will be affected. Statutory sick pay doesn’t pay out anything like enough to help with the financial impact that serious illness can cause.
The insurer calculates a premium on your risk profile. If you have a family history of serious illness or you smoke or drink heavily your premium will be higher. Premiums are assessed on the individual but if one or more of your family have been critically ill, particularly under the age of 50, this could increase your premium by 50 per cent