This has been the year to discover what’s important to you and to take steps to make sure those are protected just in case anything happens to you. Protection policies help guard your future against the risk of disease, injury or illness, and death. But what is the best way to ensure protection?
This does not constitute advice and advice should be sought in all instances before acting on it.
The pandemic has highlighted the benefits of wealth protection, and many of those who have never had any kind of wealth protection, have taken up insurance over recent months.
What’s your plan for protection?
With insurance providers continually reviewing their policies, it is best to act now so you get the exact coverage you need. You will want to ensure that your family and their standard of living is secure if you can no longer work or if you should die prematurely.
So, ask yourself what your plan is. Do you have enough saved to get you through a period without income on top of what you are already experiencing during the lockdown? Most people don’t have enough saved up for more than handling small emergencies and eating into retirement funds is never a good idea, plus you could actually face hefty penalties for early withdrawal. The importance of having a multi-pronged approach to wealth protection cannot be emphasised enough.
Check out our client case studies to see how having wealth protection could secure your financial future.
The three tenets of protection
There are three tenets of protection that can help doctors and dentists safeguard their family’s future:
- Life Insurance,
- Critical Illness Cover, and
- Income Protection.
Income Protection (IP)
- Meant to help you and your family financially survive an illness or injury.
- Directly related to your income and usually pays out 50%-65% of your gross income (tax-free) while you can’t work.
- You can submit multiple claims during your policy term and payments can continue until retirement or death.
- Some policies might have pay out terms dependent on whether or not you can perform any job while others will dictate that you’re unable to perform your job, specifically.
- A wider variety of illnesses are covered compared to Critical Illness Cover.
Critical Illness
- Similar to IP, the money received can be used to pay the mortgage, rent, bills, or even groceries.
- The illnesses covered are more selective.
- Only one claim allowed during your term.
- Pay out is in the form of a lump sum.
Life Cover
- Ensures your family has the money they need to survive in the event of your death.
- Ideal for outstanding mortgages as it is meant to replace the income that you earned while alive that will no longer be available to your family.
- It provides a cushion to deal with any unexpected expenses if built into your policy.
- Pay out is in the form of a one-time lump sum.
Get Protected
Darren Scott-Guinness has years of experience and a wealth of knowledge about the industry and economy and is happy to help you form a contingency plan to cover all bases and protect your income should you become ill, injured or die.
It’s crucial to meet with a financial adviser to review your financial assets and determine your coverage needs. Get in touch to get started on your protection plan.
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Dental & Medical Financial Services have been helping doctors and dentists to build and protect their wealth, whilst saving tax for over 25 years.