Financial cover can provide a valuable safety net for your income, home and family in case the unexpected happens. Here’s what it covers, why most people need it and how it works.

Financial protection can provide a valuable safety net if you can’t work due to illness or injury. It can also cover your family if the worst happened and you were to pass away. Cover be tailored to your circumstances, financial commitments and budget.

MB Associates recently expanded its protection department to help more clients build a financial safety net around their income, home and family. Highly experienced Protection Specialist Glynn French is now working alongside fellow Protection Specialist Nick Carter and Protection Coordinator Liz Sansom to provide guidance and support throughout the process. Glynn has years of experience helping families find the right cover for them.

How would you pay your bills if you were ill?

Most households rely on a regular income to pay their mortgage or rent, bills and everyday living costs. If you were unable to work due to illness or injury, how long could you continue meeting those commitments? At the time of writing, Statutory Sick Pay in the UK is only £123.25 per week. Many people think their employer would take care of them if they became ill but according to studies by The Health Foundation and The Work Foundation, up to 54% of firms prefer to stick with Statutory Sick Pay amounts.

Financial protection is designed to reduce financial pressure when the unexpected happens. Depending on the type of cover you choose, it could provide a lump sum or regular payments to help you and your family manage financially.

The main types of cover include:

  • Life insurance – this can provide a lump sum if you die during the policy term.
  • Critical illness cover – this can pay out a lump sum if you are diagnosed with one of the serious illnesses covered by your policy.
  • Income protection – this can provide a proportion of your income on a monthly basis if you are unable to work because of illness or injury.

What happens when you speak to a protection adviser?

The process begins with a conversation about you. Your adviser will take the time to understand your circumstances, including:

  • Your income and household expenditure
  • Your mortgage, rent and other financial commitments
  • Any savings or emergency funds you have
  • Your employer’s sick-pay arrangements
  • The people who depend on you financially
  • Any cover you already have
  • How much you can comfortably afford each month

They can then explain the available options in straightforward language and identify where you may have gaps in your financial safety net.

Recommendations can be tailored to reflect your priorities and budget. You don’t necessarily have to take out every type of cover or select the highest possible level of protection. The aim is to find a suitable and affordable balance that provides support without putting you under financial strain.

Your adviser will also explain important details such as what a policy covers, how long it lasts, when payments begin and any exclusions or limitations that apply. If you decide to proceed, they can arrange the cover for you.

Already got cover?

Taking out financial insurance shouldn’t be viewed as something you arrange once and then forget about. Your policy will generally remain the same unless you review or change it, even though your life may have moved on considerably.

If you have not reviewed your financial protection in the last few years, your circumstances may have changed. You might have:

  • Changed jobs or experienced an increase or decrease in income
  • Moved home or changed your mortgage
  • Started a family or entered a new relationship
  • Become self-employed
  • Taken on additional financial commitments
  • Experienced higher household costs
  • Used some of your savings or emergency fund

During a protection review, an adviser can explain what your existing policies include, check whether the level of cover still reflects your needs and identify any potential gaps.

For example, your life insurance may no longer match your mortgage balance, or your income protection benefit may not align with your current salary and employer sick pay.

Whether you’re thinking about financial protection for the first time or would like your existing arrangements reviewed, the MB Associates protection team is here to help.