As difficult as it is to think about, the time comes when we wonder how our family would cope if we became ill or unable to work. In the worst case scenario, how would your family manage after your death? These are sensitive subjects but ones we need to think about and prepare for.
Financial protection is an insurance policy taken out by you which ensures that your family will be looked after in a time of severe stress and upset and allows you the peace of mind that your loved ones are protected. The type of financial protection policy you need will depends on your circumstances and one of our financial advisors here at Prisma Financial will be happy to support you every step of the way. In the meantime, let’s look at some of the types of financial protection available.
Income Protection
Should you become unable to work due illness or injury, income protection will pay you a regular monthly income until you are able to return to employment. Your income protection premium will be paid via a schedule that suits you whilst you are healthy and in employment and is something you can fall back on to replace your income if you fall ill or suffer an injury.
Critical Illness Cover
Critical illness cover is a little different to Income protection in the sense that you will be paid a tax-free lump sum if you fall ill with a critical illness covered under the terms of your policy. It’s wise to check with your financial advisor what illnesses are covered before you take out the policy. You can take out critical illness cover on its own or alongside other policies such as mortgage protection or life insurance.
Life Insurance & Life Assurance
Life insurance is a policy taken out to protect your loved ones in the event of your death and runs for a fixed term, if you die within this period of time, your family will receive a lump sum, if you outlive this fixed term, the policy becomes void. This can also cover for the whole of your life until you pass away and will then become payable in a lump sum to your next of kin.
If you aren’t sure which type of financial protection will suit your family situation and you wish to talk through your options with one of our friendly, impartial financial advisors, please contact us.