What would you do if you were in an accident and couldn’t work? What would your family do if you passed away? And would you be able to keep paying your bills if you were diagnosed with a serious illness such as cancer?
Protection gives you the peace of mind that you and your loved ones will receive financial support when the unexpected happens.
Despite this, millions of people have no protection in place. If you’re one of them, it leaves you, your partner, your family, and your business vulnerable to unanticipated events. And, as the last couple of years have shown us, you’re never quite sure what’s just around the corner.
Indeed, research from Halifax has found that people are three times more likely to insure their pet than they are to take out any personal insurance against being diagnosed with a critical illness.
Trade publication FTAdviser asked protection experts what they believed were the most common barriers to individuals taking out the right protection. Here’s what they said – and why what you think may be wrong.
It is too expensive
In a world where other costs of living are rising, you might see insurance as an unnecessary expense. However, it’s important to think about what you would do if you didn’t have any cover in place and something happened.
Could you pay your mortgage or bills? Will your family be able to maintain their standard of living? Would your children have the same future you planned for them?
Protection can cost from as little as a few pounds every month, and, as protection expert Naomi Greatorex told FTAdviser: “some protection is always better than nothing”.
If you’re concerned about the cost, options such as family income benefit may be useful. This type of cover provides a monthly income on death (rather than a lump sum) and can be a more cost-effective way of putting the right cover in place.
I don’t have the time to sort it out
Even if you understand your need for protection, getting around to sorting it out can be another barrier. It can seem like one of those jobs you just keep putting off!
However, delaying putting cover in place can sometimes mean it ends up costing you more.
For example, if you suffer an illness before you take out your cover, it may increase your premiums. It may also mean that the particular condition is excluded – meaning you couldn’t claim for it.
Using a specialist protection expert like I’m Insured takes away a lot of the hassle. Just complete one simple online form and we’ll do the rest. We’ll scour the market to find the right cover for you at the right price – and our experts can also help you with any questions you might have.
I already have cover through work
If you’re employed, it’s possible that your employer might provide some perks. These might include:
- Death in service (life cover)
- Sick pay
- Medical insurance or a healthcare plan.
While these benefits may be useful, will they be enough for your needs?
For example, death in service will typically pay a lump sum of between two and four times your annual income if you die. Will this be enough to repay your mortgage and other debts?
Also, if you change employers, you might lose some or all the benefits you have in place. This could leave you worryingly underinsured.
Finally, you might assume that the perks you get from your employer are more significant than they actually are – particularly when it comes to sick pay.
Naomi Greatorex continues: “I find lots of clients have never really thought about this; didn’t know the length of their sick pay; or, in a lot of instances, don’t understand what is offered as Statutory Sick Pay.”
Again, we can help you. Get in touch with us, let us know what your employer provides, and we can help you to work out what level of protection would be appropriate for you.
You don’t know where to go for cover
Finding the right financial products can be tricky. Should you go to your local bank or building society? Respond to an advert you have seen online? Or seek out a financial adviser?
When it comes to protection, it can really pay to work with an expert who specialises in this area. That’s because they:
- Work with dozens of insurers across the industry, so can scour the market on your behalf
- Have experience in helping customers like you to find the right cover
- Can access competitive rates for cover, and search the market to find the lowest premiums
- Answer all of your questions about protection and what sort of cover you might need.
As specialist protection experts, we’re perfectly placed to help you. We work with dozens of the UK’s leading insurers including Legal & General, LV=, Royal London, and Aviva so you don’t have the hassle of ringing up multiple companies for quotes.
We can answer all your queries, find you the right cover, and work closely with the providers during the underwriting process to make things as hassle- and stress-free as possible.
I don’t trust insurance
Ensuring your mortgage could be repaid if you died or suffered a serious illness is often a key piece of sound financial advice.
Yet, according to Stacy Reeve from the Association of Mortgage Intermediaries, many people believe they are being “sold” cover in the interests of the adviser. She says: "42% of UK adults feel their mortgage adviser only suggested protection for the money and not to ensure they were financially protected."
In addition, many people believe that insurers will do anything they can to wriggle out of paying a claim.
Clearly, there remains a trust issue when it comes to insurance. However, it’s important to remember that:
- Protection is one of the key pillars of financial advice and so experts recommend it because it’s important
- Insurers pay the vast majority of protection claims. According to the Association of British Insurers, 98% of all protection claims were paid in 2020. That’s the equivalent of £17 million every single day.
I just don’t need protection
If you think you don’t need to protect your family, mortgage, or income, simply ask yourself some questions.
- Could I afford to pay my mortgage, rent or bills if I couldn’t work?
- Would my family be able to remain in our home if I died?
- Could my children maintain their standard of living if I wasn’t around?
- Could I afford my lifestyle if I was diagnosed with a serious illness?
If you have any sort of financial commitment, a partner, or a family it’s likely that you need protection of some sort.
It’s too complicated
Many people are put off from arranging the protection they need because they just think the whole thing is too complicated.
As protection experts, our job is to make things simple. So, for example, head to our website to read our plain English guides to:
- Life insurance
- Family income benefit
- Business insurance
- Mortgage protection life insurance
- Critical Illness cover
- Income protection
We specialise in this type of protection, so we’re ideally placed to answer all your questions and to help you understand exactly what cover you have.
Our beginner’s guide to life insurance is a great place to start if you’re confused or you just find protection too complicated. Or, get in touch with one of our experts – we’ll be happy to answer any questions you might have.
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