Mortgage & Family Protection
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Mortgage & Family protection
Chris Anderson talks us through our mortgage Family” protection optionsWhat is mortgage & family protection and why is it so important?
Protection can provide financial security for you or your family. Be it short or long term. It allows you to provide the type of life you had envisaged for yourself and your family even if something goes wrong.
Part of financial wellbeing is knowing that you can pay the bills today and can deal with the unexpected
You are your own biggest asset and it’s not even close. Your standard of living and your future goals, your savings are all built on your health and your ability to earn income.
Your health is your wealth. What position would you or your family be if that was taken away?
Why do we need life insurance? Do I need life cover?
It is a financial lifeline for those that you leave behind. It’s peace of mind that your loved ones will be financially comfortable after you’re gone.
You could be a young family, approaching retirement or in retirement, everyone’s situation and their goals are unique. The first step is to know where they would be financially tomorrow if the worst were to happen today.
Is that sufficient to achieve your goals and aspirations or would they have to reduce their standard of living just to get by?
With the right planning you can ensure they are financially secure and can afford to live you had planned.
I’m going to share what life cover I have personally and why I have it
I’m 32, I’m married with a young child and they’re probably going to be financially dependent for another 20 years. If I die I want to start by clearing the mortgage, secure the family home. That’s a good first step but all the other bills don’t stop and that’s the same for everyone but in my case there’s a financial dependant.
The last thing I want is my wife worrying if she can keep up with the bills or afford to raise our child or have to reduce their standard of living just to survive. It costs just under £200,000 to raise a child to 18.
So after the mortgage is cleared my wife will get £600,000. That is a large sum of money, but not over the next 20 years my son is still financially dependent. £30,000 a year over the next 20. But with this comes options
If she wants to take a year or a few years off work she can. She could work part time and still have a good quality of life and do all the things we imagined. To me that’s financial security for my family.
Speak To an Expert
Whenever you choose to seek an advisor we will help you get into a better financial position than you are today.
Do I need critical illness cover?
Financially it could have a similar impact to your death, would you still want to create that same financial security that you imagined previously
Consider How a critical illness like cancer, like a heart attack would affect your ability to work and earn an income? What impact is that going to have on you or your family? You might be trying to take care of the mortgage, other bills and all the additional costs that come with caring for someone with a serious illness
This cover also extends to children so in the worst-case scenario where they become ill, you’re financially supported to take time off work and fund the additional costs that come with looking after a sick child. Caring for a child with cancer for example was shown to increase a family’s outgoings by £700p/m and decrease their annual income by more than £6,000.
Critical illness cover pays a tax-free lump sum to help minimise disruption to your family’s life while you’re going through your illness. It takes away that financial burden when someone is sick.
What is income protection?
Income protection is like private sick pay. Generally, if you ask someone what their biggest asset is, most people will say it’s their home.
As an example, let’s imagine a 35 year old earning £35,000 per year. They have 30 years until retirement. 30 years of £35,000 is just over £1,000,000 in income that they will generate up to retirement – not including any pay rises along the way.
How much income will you generate over that time? Your biggest asset normally isn’t your home, it’s your income.
Income protection pays you a monthly salary until you can return to work or your policy ends. Unlike critical illness cover, there’s no list of conditions. It simply pays out if you can’t work due to an accident, illness or injury.
Some people might be lucky enough to have employer sick pay which is fantastic. But imagine that sick pay finished yesterday and you still aren’t well enough to work. What would the next few months or years look like for your family?
What are value added services?
The great thing about the options available here is that they provide financial help in the worst of times… but they help with preventative measures too.
These days it’s not uncommon for people to ring their GP surgery hundreds of times – as my wife did – in the short window they’re open just to try and speak to reception, never mind get an actual GP appointment.
Many of the insurance providers now offer online GP services at no extra cost. You can easily and quickly speak to a GP via video call. Another area of support is around mental health and, especially in Northern Ireland, we don’t have the capability to support everybody who needs it.
Some providers will include a range of different therapy sessions and other mental health support and benefits. There’s a huge range of further benefits that could be very useful, and your broker will be able to discuss that with you.
How can a broker help with family and mortgage protection?
We’re here to help you put that safety net in place and give you that peace of mind. People have the best intentions, but protection always goes on that list to sort out ‘tomorrow’.
But if you think about your own situation and how you might be impacted, is it really something you want to put off?
The most important insurance you’ll ever take. There’s many providers and many different options with each cover.
Your home may be repossessed if you do not keep up with your mortgage repayments.
