'Protecting yourself in 2020' by Balpreet Dhillon of Integrity Wealth Solutions
Many of us can go through our bank accounts and see the monthly direct debits we have in place insuring things we value: our beautiful pets, our trusty phones, electronics, holidays and more importantly our homes. How many of us forget the most important factor with any of these insurances?
YOU. For any of these insurances to cover/protect you, you need to ensure that you can continue to pay your monthly premiums. Very few people are prepared for the worst, are you? Planning and preparing for this can bring peace of mind to you and your family.
There are five main types of personal protection :
Life Cover
Mortgage Protection
Critical Illness Cover
Income Protection
Family Income Benefit
For more detail on each of these insurances please visit our online guide by clicking here . The following case study highlights how these insurances work in practice and their approximate costs.
Personal Protection in Practice - The Case of Oliver and Katherine
Oliver and Katherine are married and have a little girl, Willow. They have recently moved home, as their family grows. Oliver has gone part time since Willow was born and is considering becoming a full time stay at home dad. They have designed their mortgage to be repaid by their 60s. Since Willow was born and the new house move, they have really grasped their monthly expenditure and are able to budget with the help of our monthly expenditure planner.
I arranged a meeting with Oliver & Katherine at a time to suit them. During the meeting they discussed their existing arrangements, which had not been reviewed for some time. They had outgrown their policies, their current policies were set up when they purchased their first home and their current life or earlier critical illness policy sum assured was £89,000, leaving the couple with a shortfall of £31,000. We did an enhanced comparison with their current policy vs their new policy, ensuring that more critical illness definition was met, and that the policy now covered Willow. With an increase in expenses and salary their current cover was insufficient and would not meet their needs. After reviewing their existing cover I created a tailored protection review summary which can be seen below:
This aided Oliver and Katherine to make an informed decision regarding their protection. I factored their existing cover and cover provided by Katherine’s employers into her research. As I pinned down their expenditure, they were able see a surplus income and work towards a budget of £60 per month.
My final recommendation was -
Decreasing life term assurance policy with critical illness cover and children’s benefit for £120,000 which was in line with their mortgage.
As well as this I recommended £2,250 per month income protection starting after 24 weeks, due to Katherine having sufficient sick pay provided by her employer which will pay out until age 60 (with waiver of premium).
The total monthly premium was within their budget, costing the couple £58 per month.
This has given Oliver and Katherine peace of mind should the worst happen. If you think that you are in the same position as Oliver and Katherine with out-dated policies or perhaps you don’t have any protection in place, please do not hesitate to contact me. You can call me on 078 4339 9513 or email [email protected] and I will be happy to help.
With thanks,
Balpreet Dhillon