Typically, protection insurance has three elements, life cover, critical illness cover and income protection…
New Year usually triggers a lot of introspection and resolutions of making a better you. Every newsp….
Not everyone needs life cover; but if you have a mortgage, other debts, a dependent spouse or children then the answer is yes – life cover will protect your loved ones from the financial…
The old guard in financial services always said that policy sales were based on fear or greed, so the best way to get someone to buy insurance was to appeal to those raw emotions.
So where do you find the fear or greed in life insurance? Why would anyone want life insurance? Greed cannot apply as the insured would not be around to spend the sum assured, so logically fear must be the key.
A typical advice scenario would be a young couple with a small child living in their own home with some consumer debt and servicing a large mortgage. So long as nothing major goes wrong, all will be well in time, but what happens if one partner dies?
As most of the main stream media are full of tales of bad advice and poor advisers, I was pleasantly surprised to see a positive piece on the Telegraph Money web page last week, (see here: http://www.telegraph.co.uk/money/special-reports/learnt-met-financial-adviser-first-time/). Although the writer is a newly freelance journalist, concentrating on financial matters, she makes it clear that she has no specialist knowledge in the personal financial field and was surprised at the priorities of her new financial adviser. She was expecting a conversation about pensions and the adviser was asking questions about disablement and death!
There is a lot of fuss in the press about buying protection insurance from the Internet as it is much “cheaper” than using a regulated adviser. Unfortunately, there is not much coverage about the downsides, like “computer says no” or not selecting the correct additional features.
If you go to any comparison website or get phoned by someone offering “direct” life cover, they will be quoting on the basis of a “standard life”, so for the age based rate to be valid, you have to be currently healthy, have averagely healthy parents and siblings and not be diagnosed with any of a huge number of chronic illnesses...
I have just completed some work for the chairman of a local charity I am treasurer of, which raised a few issues about how you research your pension options. Having contacted his pension provider, he was just about to cash his main pension in when he read the small print on the pack they sent him. The elephant in the room for Pension Freedom is the tax due to HMRC if you take your pension as cash; the bill for him could have been enough to buy a very nice, shiny car!
For someone who has been working for a few years or has graduated and has a steady career, the next big financial goal is usually a home of his or her own. Much press coverage has talked about the “Boomerang Generation”, (offspring returning to the family home every few years, driven by unemployment, poor health or a bad partner choice), but getting a house and a mortgage is still a priority for many.
Most financial planners, ourselves included, try to persuade clients to draw up wills and “Lasting Powers of Attorney”, as these are the building blocks for any realistic strategy to protect family wealth. Whilst Wills deal with our assets on passing, Lasting Powers of Attorney (LPAs) relate to decision making and mental capacity during your lifetime.