The value of investments and any income from them can fall and you may get back less than you invested.

Five ways to make sure your finances are protected

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Financial protection is one of the most overlooked areas of finance.

Saving and investing are important, of course, but ensuring our loved ones are provided for should the worst happen is also a key part of many financial plans.

Here are the five different types of financial protection that you need to know.

Life Protection  

Anybody with dependants or outstanding debts such as a mortgage should consider taking out a life policy.

At the very least, it should ensure your family can keep their home, but ideally it would also provide an additional sum as a financial buffer at a difficult time.

There are different types of policy available, from ‘whole of life assurance,’ which covers you for your entire lifetime, to ‘term assurance’ policies which provide life cover for a fixed  period of time - 10 or 20 years, for example - and are often used in conjunction with a mortgage.

Income Protection 

These policies protect a portion of your salary, typically paying out between 50%-70% of your income. You will receive monthly, tax-free payments that will cover some of your lost earnings, if you are unable to work because of illness or injury. 

They are vital policies for those with dependants and debts but the terms of these policies vary.

It is important that you understand the terms of the policy so you know the situations where you’re covered, how long it would be before payments begin, and to make sure your coverage suits your needs.

Critical Illness

These policies pay out a lump sum on diagnosis of one of the critical illnesses covered by the plan which typically include strokes, heart attacks, certain types of cancer etc.

Each policy will have its own list of conditions it covers, and it is vital to familiarise yourself with the full list and when you can claim for these illnesses before you apply.

Family Income Benefit

Family Income Benefit is a term insurance which lasts for a set period of time known as ‘a term’. The policy will pay out a monthly, tax-free income if you die during the term, until the policy ends.  

So, if you take a 20-year family income benefit policy and die after five years, it will continue to pay out for another 15 years.

There is no cash in value, so if you stop making premium payments, your cover will end.

Private Medical Insurance

This will pay for the cost of private healthcare treatment if you are sick or injured.

Premiums are paid monthly or annually but most policies do not cover pre-existing conditions.

 

 

To find out more about how Brewin Dolphin can help you protect your finances, request a call back today.


 

The value of investments can fall and you may get back less than you invested.

 Please note that this document was prepared as a general guide only and does not constitute tax or legal advice. While we believe it to be correct at the time of writing, Brewin Dolphin is not a tax adviser and tax law is subject to frequent change.  Tax treatment depends on your individual circumstances; therefore you should not rely on this information without seeking professional advice from a qualified tax adviser.

 

The information contained in this document is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness.

 

No investment is suitable in all cases and if you have any doubts as to an investment's suitability then you should contact us.

 

We or a connected person may have positions in or options on the securities mentioned herein or may buy, sell or offer to make a purchase or sale of such securities from time to time.

 

In addition we reserve the right to act as principal or agent with regard to the sale or purchase of any security mentioned in this document. For further information, please refer to our conflicts policy which is available on request or can be accessed via our website at www.brewin.co.uk

 

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