The start of a new year provides the perfect opportunity to assess whether you have the right level of financial protection in place to cover you in the event of a crisis.
Regularly reviewing the amount of protection you have is particularly important if anything has changed in the past year, such as getting married, having a baby or buying a larger property.
If so, you may now need a higher level of protection, while if you got divorced or downsized your property, you may want to reduce the amount of cover you have.
Why life insurance matters
Life insurance provides valuable peace of mind that your family or other dependants would be financially protected if you were no longer around to provide for them. Policies can be bought for as little as £5 a month, making it a small price to pay to help safeguard your family’s future.
At a minimum level, it’s important to ensure you have enough cover to pay off your mortgage, as this is likely to be your household’s largest single outgoing. It’s also worth reviewing how much other debt you have, such as personal loans and credit cards, and whether you need to increase or decrease your level of life cover accordingly.
Consider too whether you want additional protection to cover childcare costs, education expenses or household bills. If your children have now grown up and moved out of home, you may need to alter your cover.
If you’ve recently changed jobs, check whether your employer offers death-in-service benefits which can be around four times your salary.
If so, you may decide to adjust the amount of cover on your own life insurance policy, but do this with caution as you could lose these benefits if you move to another employer at a later date.
Consider critical illness cover
If your life insurance policy does not include critical illness cover, it can be worth adding it for an extra premium. Critical illness cover will pay out a lump sum if you are diagnosed with an illness or condition listed on the policy.
Conditions such as heart attacks, strokes and certain types of cancer are usually covered, but this will depend on the policy.
Protect your income
Income protection cover is another important consideration if you do not already have this in place. Income protection can replace your salary if you cannot work due to an accident, illness or redundancy, helping you to keep up with financial commitments while you’re out of work.
Always check exactly what your policy covers and whether there is a waiting period before you will receive your pay out. This is often at least 30 days.
Get in touch
If you would like advice on reviewing your cover, please don’t hesitate to get in touch. We can help ensure you have the right financial protection in place.
As with all insurance policies, conditions and exclusions will apply
Catch up on our other blog posts:
Seven million people are keeping quiet about mental health issues, while nearly four million are hiding a physical health problem from their families, according to a study1. Keeping loved ones in the dark about health issues can create problems both now and in the...
The temporary raising of the nil-rate Stamp Duty band threshold to £500,000 ended on 30 June. The measure was introduced in July 2020 to maintain confidence in the housing market during the pandemic. Don’t despair if you missed the deadline, as there's now a tapered...
House prices continue to rocket, with the Nationwide House Price Index1 revealing annual house price growth of 13.4% in June, the highest level since November 2004. The extended Stamp Duty holiday, in addition to the new mortgage guarantee scheme and changing...
(Your home may be repossessed if you do not keep up repayments on your mortgage)
We charge a fee for arranging and advising you on the mortgage. The fee will be dependent on your circumstances but will not exceed £499. (Our typical fee is £299.)
For Lifetime Mortgages/Equity Release the fee will be £799.
Our mission is to provide honest mortgage advice, whilst helping you save money.
Get in contact
Or call —02380224925