How To Know What Type Of Protection Insurance You Need

What type of protection insurance you need will depend on your personal circumstances. We can help you find the protection cover that is most suitable for you, and help you through the process of weighing up the options and finding the cost of the insurance.

There are different protection insurances protecting against different types of events and offering various levels of cover. Life insurance policies pay your dependents money as a lump sum or as regular payments if you die. If you have to stop working due to an accident or a serious illness then there are two main insurance options:

Income protection insurance that covers some of the income you lose if you can’t work because you are ill or injured. It ensures you continue to receive a regular income until you retire or are able to return to work.

Critical Illness insurance that pays out if you get one of the specific medical conditions or injuries listed the policy. Providers vary the definitions of an illness so it’s important to check and review what the policy covers. Pre-existing conditions may not be covered. The most common are stroke, heart attack and certain types of cancer.

We usually advise our clients to save up enough money to cover three months of living expenses. However, it can take up time to save that sum of money and therefore protection insurance might be a cost-effective way to protect yourself.

The most important thing when considering protection insurance is that the product reflects your personal circumstances and what you want to protect. For example, a life insurance product usually makes sense for couples or parents. But it wouldn’t suit someone with no dependents, as the policy only pays out when you die. On the other hand, if you are someone without dependents then income protection insurance might be better as this would cover you if you lose your salary due to illness or injury.

If you can’t afford to get cover for everything you want to protect, think about your priorities or consider a lower level of cover. Some protection might be better than none.

What is the cost of protection insurance?

There is a number of factors that affect the cost of protection insurance and it is not simply a case of signing up to the cheapest policy. Factors that affect your monthly payments include: the product you are taking out, how long you are taking it out for, age, marital status, whether you smoke or not, your lifestyle, health, job, and whether you are taking out a single or joint policy.

How much cover you need then depends on: your take-home pay, day-to-day living costs, debts, mortgage/rent.

*Please note: Life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse

Working out your options

It is useful to weigh up the costs of a policy against the risks of being uninsured. For example, how much would you lose if you became ill and found yourself unable to work or how would your family cope financially after you die if there’s no life insurance in place?

Also, weigh up the risks and benefits of protection insurance against the cost and coverage. It is up to you to decide what’s important to you and how you’ll protect it.

Think about what you need to protect the most (e.g. providing for your children, covering your mortgage payments), then consider what protection you already have (e.g. some employers include life insurance in their benefits package), then work out what protection insurance you want based on the cover you already have and what you want to protect.

If you would like to learn more about the protection cover available to you and your circumstances then please email us at info@resolvefs.co.uk or call 01932 943028 to speak with a member of our team.

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