Brace yourselves, this gets quite ranty and is born out of a real life and tragic situation we are currently helping clients through.
Life has a way of really doing you over. It can be turned upside down in a second. Forever.
Out of the blue something immensely cruel and unfair happens. Nothing will ever be the same again.
It is a disaster. Disasters are why insurance exists.
For most, insurance is the only option.
And you’re very likely to not have anywhere near as much as you should have. Especially if you have children living at home.
Let’s be clear – should the worst happen, no-one ever has or ever will say:
“Why have we got so much insurance?
What are we going to do with all this money?”
The basic premise is you want your family to maintain your standard of living regardless of what happens.
Or at least not leave your family having to make really difficult decisions at a terrible time. Like having to sell the house to feed themselves because there’s no income coming in.
If that’s not the case what sort of psychopath are you?
And you’ve no need to read any further, what would be the point?
If you’re still reading, well done.
This is how you should be thinking about your protection needs. It’s really simple:
- If either of you die you want enough to clear mortgages and any other debt.
- You’ll need a further lump sum to avoid having to fire sale assets.
- And you need to replace the income that now won’t be earned – those bills will not pay themselves.
But what if you don’t die and instead simply can’t work? It gets even worse.
You’re now a massive liability – you still need feeding but might also need care as well as costing more generally. And there’s no income coming in.
This is where income protection comes in – it provides income if you can’t work.
Or you throw yourself on the mercy of the State. £89.35 pw is what they pay if you’re too ill to work.
So, stop mucking around, pretending you’re invincible or that your parents will be able to help (Still? At your age?).
And for God’s sake don’t delude yourself that, somehow, everything will be alright because the mortgage will be cleared if you die.
It won’t – without your salary your family are doomed. Without your full pension your other half is probably doomed.
Can you really think of anything more important than keeping your family off the breadline should the worse happen?