A lot of information from personal finance content creators including this blog is guilty of focusing on other areas of personal finance like budgeting, eradicating debts, investing etc. Yet, there’s an unsung hero that is the backbone of your financial well-being this is wealth protection and a guide to life insurance is at the core.
Wealth protection lays the foundation for your financial peace, yet its importance frequently remains unnoticed.
In this guide, we will cover everything wealth protection which is more than a guide to life insurance. So, let’s embark on this journey to protect your wealth and legacy.
Many of us are in the wealth-building stage in life, I know this because we still need an income either through a job or business this means there is a massive risk with that.
Last week I heard the heart-rending story of a doctor who died suddenly leaving behind an unemployed pregnant wife and a young child.
His story is a sobering reminder of the unexpected turns life can take and serves as a catalyst for this post, I only hope that he had some sort of protection in place to support his loved ones financially
As a father myself, the thought of my family grappling with financial hardship, if my income were to suddenly disappear, is unbearable. That is the essence of wealth protection – safeguarding our loved ones from the financial repercussions of life’s unforeseen circumstances.
At least till you reach financial independence and work becomes an option.
Take a moment to think: What would happen to you and your loved ones if you lost your ability to earn today? This loss can range from the extreme eventuality of death to a bout of flu.
How would you and your loved ones fare? Choosing not to protect your wealth by laying a sure foundation of insurance is like gambling, it’s a risk that’s too high.
There is also another story of a business analyst who bought a term life policy with critical illness. When she faced a serious illness, she had peace of mind knowing her mortgage repayments and household bills were covered with a lump sum payment.
Her story encouraged me to take out life insurance with vitality which I am happy with, also because they reward you for being healthy or having healthy habits. Use this link to get started and you get a £100 gift card reward.
Life insurance is a financial safety net that keeps your loved ones afloat in the event of your death. But which one is a good fit for your personal circumstances? Here are different types of life insurance
Term Life Insurance: This type of insurance policy covers you for a specified period of time or ‘term’. The beauty of term life insurance is its simplicity and affordability. It could be either
Level term cover, meaning the lump sum payout remains constant over the length of the policy. If you pass away during the policy term, your beneficiaries receive the death benefit.
Whole-of-Life Insurance: As the name implies, this cover lasts your whole life. It guarantees a payout upon your death whenever that happens. But this comes at a cost – higher monthly premiums.
Life insurance isn’t a one-size-fits-all product. Your choice depends on factors such as your medical history, financial dependents, and outstanding debts.
In the section below we will consider factors to consider before you choose one.
Critical illness cover. A battle with a grave illness not only takes a toll on your health but could also your finances. This is where critical illness insurance, a type of term insurance, steps in.
This policy pays out a lump sum if you’re diagnosed with specific medical conditions listed in your policy.
These illnesses often include cancer, heart attacks, strokes, multiple sclerosis, motor neurone disease, loss of limbs, paralysis, and more. It’s essential to read the T&Cs as there can be key differences in the criteria for payout
Most term life insurance cover offer combined life and critical illness policies, again read and understand the terms of the policy
Income protection insurance: This solution is designed to replace a substantial portion of your income, generally between 50% and 65% if you are unable to work due to illness or injury.
The catch, however, lies in the policy’s definition of unable to work.
There are a few things to consider when choosing an income protection insurance policy.
When it comes to life insurance, the best policy is the one that’s tailored to you. But how do you find the most suitable cover?
First, prioritize your needs. Your unique circumstances will dictate the importance and relevance of each type of cover.
For instance, if you’re a young, single professional with no dependents but a hefty student loan, you may want to prioritize income protection insurance. It can help maintain your lifestyle and financial commitments should an unexpected health issue disrupt your earning capacity.
If you have just bought a house with a mortgage and have a growing family, having term life insurance at the top of your list followed by income protection and critical illness might be the way to go.
Seek advice or use a comparison website.
Once you’ve found the right policy, make your move. Just remember, it’s crucial to review your cover regularly or when your circumstances change.
Life insurance, particularly term life insurance, isn’t just about planning for death; it’s about planning for life – a life with financial protection and peace of mind. We hope this guide has given you the information you need to make an informed choice.
Don’t wait for uncertainty to knock on your door. Secure your future and your loved ones today.
Take the first step towards a protected future. Click here to get a quote for term life insurance tailored to your needs from Vitality or click here to join vitality and get a £100 gift card reward
