|Personal Plans - Financial Protection|
The financial contribution you make to your families household and lifestyle is greater than you may realise. Have you considered what will happen if you couldn’t work or were no longer around?
A useful technique is to think about the circumstances you may already be insured against:
• Mobile phone against theft or damage.
• Car against accident or damage.
• Household contents against damage or theft.
Have you considered insuring yourself? For parents, whose financial contribution to the family is often vitally important, this is essential!
The past 100 years have seen life expectancies rise dramatically, yet this change does not remove the risks that we all still face and the potential for premature death. It’s also important to remember that it’s not just the risk of dying, but also the financial consequences of surviving that needs to be considered.
More people than ever are surviving critical illnesses, such as cancer and strokes, but this in turn means that more people are taking prolonged periods off work for treatment and recovery. It’s not just physical critical illnesses that result in time off work though. Income Protection claims statistics show that 32% of people claim for mental health disorders such as stress and depression.
If you were unable to work for a prolonged period due to accident or illness, or was no longer around, what financial impact would this have on your family?
The Cost of a Dad
With most Dads multi-tasking to the extreme each day as a part-time taxi driver, handyman, gardener and sports coach, the cost is remarkably expensive if they were unable to work.
In fact, according to research conducted by Friends Provident into the cost of a Dad, all the jobs Dads do around the house save the family £12,914 a year, with handyman jobs topping the list of costs saved.
With the average earnings for men currently standing at £30,9481 and Dads saving the household around £12,914 a year, what would your client’s family do without Dad?
But what about Mum?
The cost of replacing Mum is equally high. Mums often take on the same chores as Dads and are likely to save family costs on additional household jobs such as childcare and private tuition. So, if Mum was no longer around, what financial impact would this have on the family?
Of course Mums don’t just do household chores. With the average earnings for women currently standing at £23,9771 more and more women are either the main breadwinners in the household or are single parents. Combine this with statistics that show more women are setting up their own business, (according to the Department for Business, Enterprise and Regulatory Reform, almost 1,000,000 women are self-employed, representing 27% of the self-employed ), you find it is becoming increasingly important for women to protect their income.
If you are parents and haven’t taken out life insurance (to protect against death) or income protection insurance (to protect against long-term sickness or injury) you could be gambling your family's security and well-being.
You may think that the state will support you in the event of unemployment, but the reality is that the level of financial support provided by the Government is subject to strict qualifying rules and won’t necessarily cover all of your costs.
The very basic level of support would not sustain your current lifestyle, nor reflect the real costs your family would incur without Mum or Dad around (for more information visit www.jobcentreplus.gov.uk ).
You therefore need to seriously consider more comprehensive protection solutions to help protect the income and lifestyle of your family.
[adapted from article by Gemma Wills, Protection Communications, Friends Provident ]