How to Protect Your Family Against a Loss of Income
If you owned the goose that laid the golden egg, which would you insure, the goose or the egg?
While we’re working, virtually everything relies on our income. We’re the goose that keeps giving.
If this stops, perhaps due to accident, illness or redundancy, and we haven’t put plans in place to protect ourselves, things can unravel very quickly.
Yet, in a curious twist, research shows that we’re more likely to insure our pets’ health than our own.*
MAKING AN INFORMED DECISION ABOUT INSURANCE
Insurance policies like income protection or critical illness cover are designed to protect us if we become ill and can’t work. Some employers offer these as part of a standard benefits package. Find out what, if anything, you’ve got.
You don’t want to get ill, so you don’t want the policy to pay out - it’s just a trade-off.
What would the premiums be?
What peace of mind will you get?
What would you do with the money instead?
Even if you then decide that you don’t want to pay for this insurance right now, at least you’re making an informed decision which you can review as your circumstances change.
LASTING POWER OF ATTORNEY
While on the subject of ill health, consider a Lasting Power of Attorney. It’s a legal document that lets you appoint one or more people to help you make decisions or to make decisions on your behalf if you lose capacity.
RAINY DAY FUND
Another great way to protect yourself, that doesn’t involve paying for insurance or legal documents, is to have an emergency fund because it reduces your vulnerability to the unforeseen. The right amount is very subjective - it depends on your expenditure, how secure your job is, what else or who else you could fall back on at a time of need - but the knowledge that accessible money is available to you will help you feel safe and secure.
WORK, LIFE AND PRIORITIES
I’ll always remember something a high-flying client of mine once said to me in a conversation about insurance. At the time he was a senior executive in a bank, with a large income but working long and stressful hours. He’d just had his annual health check as part of his employer’s insurance benefits package.
“You know why they pay for these check-ups, don’t you?”, he commented, “It’s just to make sure that they’re not killing us too quickly”.
He left banking soon after.
Remember that you’re the golden goose.
Look after yourself.
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*"Employees value their pets over their income" - Epoq Group, July 2018
The value of your investments can go down as well as up, so you could get back less
than you invested.
Tax and Estate planning is not regulated by the Financial Conduct Authority.