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Protecting Your Family Financially

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Don’t Let Your Family Suffer Financially When Your Health Suffers


Polly Kerr

By Polly Kerr 

We’ve all heard that diagnosis rates are rising for some of the most health and lifestyle-impacting conditions from cancer to heart disease. Most of us know someone who is affected by one or the other and yet the British attitude remains, “it won’t happen to me.”
The statistics for cancer sufferers in the UK are shocking. By 2030, it is estimated that from the current 2.5 million cancer sufferers, those living with cancer will increase dramatically to 4 million, according to recent statistics from the Macmillan Cancer Charity.

Similarly, the numbers for heart disease and circularity disorders (CVD) in the UK are equally worrying, despite better diagnosis, treatments and awareness with an estimated 7 million+ people living with cardiovascular disease or heart conditions at the moment. Although death rates have reduced dramatically since the 1960’s, the fact is that CVD remains one of the biggest causes of major illness and death in the UK.

What can be done to avoid financial struggles after a diagnosis?
Millions of adults in the UK are still living and working without any form of life insurance or personal protection if the worst were to happen.

There is a huge array of options to protect yourself and your family; some starting for as little as £5 per month.
Many life insurance policies allow you to insure yourself, your partner and your children, paying out either when someone dies, is diagnosed with a serious health condition or providing that extra financial support if you need extra care following an accident or illness.


Family Income Benefit


Family income benefit is there as a safety net if one parent or partner dies in the household. As many households rely on just one wage, this protection pays a monthly, tax-free amount covering the length of the term i.e. if you take out a 20 year policy but one of you dies within 10 years, the policy will pay a monthly figure for the remaining 10 years. Not many families are aware of the family income benefit policies but by speaking to a financial advisor, you can discuss the details and benefits of such a policy for your family.


Life Insurance Policies


These policies are the most common; paying a lump sum to the remaining family when the policyholder or someone named on the policy dies. The life term policies offer peace of mind and generally cover additional expenses like end-of-life services and an amount towards funeral costs.

The pay-out amount varies depending on what sort of policy you hold and how much it is worth i.e. how many investments you have such as properties that would need to be financially provided for in case of death. The pay-out figure is also affected by personal circumstances, previous health issues, age and cause of death and any previous claims on health insurance.

Again, by speaking to a good financial adviser, you can receive the right advice about which sort of policy would suit your family best.


Critical illness cover


This can run alongside a life insurance policy or separately. It is designed to pay out a lump sum on diagnosis of a critical illness, the main three are classed as cancer, stroke and heart attack. Provider choice is crucial as some policies will cover you for the main 3 only and some will cover you for over 200 different conditions.


Income protection


Income protection will provide a monthly payment to you in the event of you being unable to work due to accident or sickness. Policies can be put in place to cover your mortgage, bills, or every day living costs. The amount that can be covered is restricted to a percentage of your gross annual income and there will normally be at least a 3-month deferment period before the policy will kick in; this would be decided upon application and dependant on your work sick pay, other policies you have and savings you may be able to use.


A time to take action


It’s a scary thought to imagine your family struggling to get by if something happened to you or your partner. No one likes to think that they may receive a cancer diagnosis but it is better to discuss and prepare for it now, when you can protect your family and investments, than wait until it happens.

It will give you peace of mind, what’s holding you back?

Macmillan: https://www.macmillan.org.uk/_images/cancer-statistics-factsheet_tcm9-260514.pdf

Family income benefit: https://www.royallondon.com/life-insurance/articles/family-income-benefit/

Read Pollys article on why you need to get on top of your financial health.

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