However, if you don’t review your policy from time to time, you could risk being underinsured, or be missing out on a newer, more cost-effective policy that might better suit your needs.
So, here are a few life stages when it often makes sense to talk about protection insurance with us.
If you’ve decided to share your lives, the chances are that you’ll also be sharing your wealth. This means that it’s important to make sure that if anything were to happen to either of you, there would be funds available to meet your financial commitments.
A larger home often means a bigger mortgage, so you need to consider taking out more protection insurance to cover the additional amount you’re borrowing.
If your family is growing, your financial responsibilities are likely to increase, and your cover will need to reflect this. It is often when families reach this stage that they find it’s appropriate to consider other forms of cover, such as accident, sickness and unemployment, critical illness or income protection.
If you’ve received a salary increase or promotion, your lifestyle might have changed too. Your children may be in private school, and your family may have got used to expensive holidays and meals out. If that’s the case, then it might be time to increase your cover, so that if anything were to happen to you, they could continue to enjoy a good standard of living.
At this time in life, a protection policy can help in Inheritance Tax planning, providing a payout on death that will help cover a tax liability on your estate.
A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Income protection (with no investment link) has no cash in value at any time and will cease at the end of the term. If you stop paying premiums your cover may end.