Despite the undeniable benefits of protecting your financial position, a survey conducted on behalf of Royal London revealed worrying figures about how respondents viewed the importance of financial protection for their family in the event of their death, or if the principal earner was unable to work.
This does not constitute advice and advice should be sought in all instances before acting on it.
Protection is part of good financial planning
Building a solid financial plan that safeguards your income, no matter what happens, is essential for dental and medical professionals.
Financial advisors recommend a solid mix of investments and retirement plans, including pensions and savings, to help achieve your long-term goals.
Another element of financial planning is identifying ways to protect your income.
(1) This can mean income protection insurance – a type of insurance that provides individuals a cushion should they lose their income.
(2) Or it can be life insurance – a type of insurance that lets you rest easy knowing your dependents will be covered should anything happen to you.
Views on life insurance
A survey conducted on behalf of Royal London revealed that only 38% of respondents understood the importance of ensuring that their families are covered financially in the event of death.
The survey reports that 36% also don’t see the need for life insurance. However, it seems the opinions about life insurance do vary depending on age.
A shocking 49% of individuals 55 or older don’t understand the importance of life cover. Surprisingly, just 26% of 18-34 year olds and 29% of 35-54 year olds feel the same.
This may seem backwards but it’s actually refreshing. It indicates that the younger generation understands how crucial life insurance can be.
A possible explanation for the supposed discrepancy is that individuals in the 55+ age group don’t have minor children think about so they don’t feel the need to leave a means for support.
Attitudes towards income protection
Opinions on income protection and life insurance do seem to go hand in hand.
However, life events such as having children or experiencing redundancy sways opinion in favour of income protection.
The survey found that nearly half (47%) of individuals with children under 18 want to protect their family’s financial future as opposed to only 35% of individuals who don’t have any dependents.
While redundancy also influences people’s opinions about income protection, only 41% who have been made redundant before believe they should invest in a way to provide for their family once they’re gone.
This percentage is slightly surprising considering a similar amount of people (37%) who haven’t previously been made redundant believe the same thing.
Most popular option is life cover
The most popular protection plan, according to the survey, is life cover which is owned by 26% of individuals. Only 17% of people in the 18-34 year old age group currently have some kind of life cover, but it seems you do get wiser as you get older. Those in the older age groups are more likely to own a life cover product – 29% of individuals from 35-54 years old and 30% of people older than 55.
For financial professionals, these results are worrisome. It’s clear that more education is needed on the importance of income protection and life insurance.
The experts at Dental & Medical Financial Services specialise in developing and fortifying your wealth. This includes finding the right protection for your family, your home and your income.
We are here to answer any questions you may have and can advise on a number of protection products from different providers so we can uncover a solution specifically for you.
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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.