Financial protection explained?

When we talk about “Protection”, we mean the different types of life and protection insurance that you can choose to put in place to guard against unforeseen events. That might be a sudden and serious illness, redundancy and subsequent unemployment, or even death. A protection policy will ensure you and your family have financial support should you lose your job or become no longer able to work.

As you go through life, your circumstances will change. You might start a family, increase your earning potential and have higher outgoings in your 40s than in your 20s for example. And as your situation changes so will your protection needs. This not something you’re likely to think about all the time, though, so one useful trigger to remind you to assess your requirements could be the point you’re reviewing your mortgage needs.

What types of protection are available?

The most common types of insurance cover include:

Income protection

If you can’t work because you have an accident, get injured or become seriously ill, your income protection will step in to make sure you don’t lose your pay. With income protection you’ll receive non-taxable payments regularly until you are able to work again.

Mortgage payment protection

If you become unable to work through illness or injury, or you are made redundant, one of your first thoughts might be how you’ll pay your mortgage. After all, it’s probably one of the largest commitments you have financially. Mortgage Protection is designed to give you peace of mind that in the event you are unable to earn you, and your family, won’t lose the roof over your heads too. 

Life insurance

Life insurance<link to blog 2, Why do I need life insurance?> is a tricky one. It can be hard for many people to face the idea that one day they may no longer be here to support their family. But when you have a life insurance policy in place, you can rest easy knowing that should the worst happen the mortgage could be paid off and there won’t be financial stress at an already difficult time. Hopefully, the policy will never be called on. But if it’s needed, a lump sum pay out can be an absolute lifesaver for family left behind.

Critical illness cover

Along a similar theme to life insurance, critical illness cover is designed to provide peace of mind that your mortgage and other financial commitments can be dealt with should you become too ill to work. Rather the paying out upon death, your critical illness cover will give you a lump sum payment if you’re diagnosed with one of a number of serious or life-limiting illnesses. Once the money has been paid out your policy ends.

Buildings and contents insurance

Buildings and contents insurance often go together under the term home insurance. The building insurance element covers the external structure of the building as well as permanent fixtures and fittings. The kitchen and bathroom for instance. Whereas contents insurance covers everything that is inside, your belongings, high value items and often even flooring and carpets.

Mover protection

Mover protection is an insurance you can buy to protect your belongings during a move from one house to another. Of course during the enormity and stress of a big move day accidents can happen, even when you employ professional movers. Make sure you talk to the company you’re using to check what is covered on their insurance and then take out a policy to plug any gaps. This becomes particularly important if you’re moving high value or precious items such as antiques or large musical instruments.

Which policies and insurances make sense for you will depend very much on your own individual circumstances. If the choice seems overwhelming and you’d like some professional, experienced advice, don’t hesitate to get in touch with our Protection Experts. They’ll be able to talk you through everything you need to know to make the right decision.