Why do I need Financial Protection?

Financial protection is crucial for several reasons. Overall, it’s about safeguarding yourself and your loved ones against unexpected financial challenges. What’s right for you will depend on your individual circumstances and priorities.

Reasons for Financial Protection:

• Peace of Mind: Unsurprisingly, peace of mind rates highly on people’s lists of priorities. Have you ever considered what would happen if you couldn't work due to illness? Could your family manage financially without your income? Having the right financial protection in place provides peace of mind. Choosing the appropriate policy will keep you financially stable, even if things go awry. It's a step that soothes worries and allows you to focus on your priorities.
• A Valuable Safety Net: Even the most carefully crafted plans can veer off course unexpectedly. When life throws a curveball, it can leave you financially exposed. While having emergency savings and other provisions is wise, financial protection serves as an additional safety net. If losing your income would strain your finances, protection can offer vital support. It ensures you can cover essentials like your mortgage or rent during challenging times.
• Time to Recover: Income protection or critical illness cover provides breathing space following illness or injury. It allows you to focus on recuperation without immediate financial worries. With financial protection in place, you can take the time you need to make decisions about your future without rushing.
• Protecting What Matters Most: What worries you most about the unforeseen? For some, it's maintaining mortgage payments if they couldn't work. For others, it's ensuring their family's wellbeing. Financial protection offers reassurance that your top priorities will be safeguarded.

Choosing the Right Protection

Selecting the appropriate policy will depend on your and your family's specific requirements. The most common types of financial protection insurance in the UK include:

• Life insurance: This offers financial security for your family in the event of your death, providing a lump sum to cover expenses like funeral costs, debts, or ongoing living expenses.
• Critical illness cover: This type of cover provides a lump sum payout  upon diagnosis of specified critical illnesses, such as cancer, a heart attack, or a stroke; it could be used to pay off your mortgage and secure your home.
• Income protection: Income protection ensures you continue to receive a regular monthly income if illness or injury renders you unable to work, helping to cover living expenses and maintain your standard of living.

When deciding which type of financial protection is important for you, consider factors like age, health, financial obligations, and lifestyle. Consulting a financial adviser can also provide clarity in assessing your needs and selecting the most suitable insurance options for you.

If you’re uncertain about your protection needs, do seek guidance from a financial adviser. Their expertise can assist you in tailoring a protection plan best suited to your individual and unique circumstances.

https://www.cancerresearchuk.org/health-professional/cancer-statistics/risk/lifetime-risk - Lifetime risk estimates calculated by the Cancer Intelligence Team at Cancer Research UK 2023.

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