I have just read an article suggesting that many people are avoiding taking out life cover with a mortgage to avoid being turned down on affordability grounds by lenders. Surely the world has gone mad!
Back in the mists of time when men on bicycles used to prowl the streets “selling” life insurance policies to the general public it was common place for couples to have insurance policies that would pay out significant sums of money to the grieving survivor along with specific mortgage protection policies to pay off the outstanding mortgage in order to make their poor grieving family’s immediate future a little more financially secure.
Nowadays, at least in my experience, now that insurance is typically bought rather than sold, this is just not the case. As evidenced by the aforementioned article, even the mortgage is arranged without life cover in order to keep the monthly cost down. To me this is madness. Whereas in the past there might have been some payment from an employers death in service scheme to soften the blow these benefits are now as rare as hen’s teeth with employers ditching traditional final salary pension schemes in favour of cheaper auto enrolment options. Should the main breadwinner in a family die uninsured then the trauma that this might bring to the surviving family could be unbearable.
I have been on the receiving end of a tragedy myself and the fact that I had an insurance policy that paid out a proportion of the sum insured on the diagnosis of my son’s cancer allowed us to take Tom on the most amazing family trip to Africa so he could fulfill his wish and see a cheetah in the wild before he died. And to think I could have saved £44.61 per month not paying for that cover!!
In my opinion every individual with a financial dependent must make sure they have a meaningful level of life cover to ensure that those dependents are financially secure for at least a couple of years after their death. You can’t know when tragedy might strike but you can be sure that without life insurance, that tragedy will be compounded for those you leave behind.
Of course the same applies to anyone in business with a third party. Where will the money come from to make sure that your surviving family receive the fair value of your share of the business. Without business protection they will have no option but to step into your shoes and run the business, even if they have no idea how to do that!
Insurance gives your family choices, don’t choose to ignore it!
To make sure its not your family that has to struggle when you’ve gone contact us for a thorough protection review.