The importance of a wealth protection plan cannot be emphasised enough, but it’s also important to remember that protection is not one-size-fits all. The coverage you need will be different from anyone else since what you need to protect will not be the same. But no matter what your level of coverage is, wealth protection will help you feel confident that your finances won’t be affected if your income is suddenly disrupted.
This does not constitute advice and advice should be sought in all instances before acting on it. The Financial Conduct Authority does not regulate tax advice.
After the uncertainty of the past few years, many people realised that having a plan for dealing with the unexpected is not only the smart thing to do, it’s essential. No one knows the future and illness and injury don’t discriminate — anyone could face a loss of income at any time. Having a robust protection plan and an updated estate plan that includes a will is one of the best things you can do for your finances.
Here are a few things to consider when creating a wealth protection plan.
Adequate protection against illness, injury, or death
As mentioned, your coverage will be unique to your individual circumstances and needs. A single person may require less protection than someone with a family and/or a home so you’ll need products that cater to you specifically.
The best way to ensure you have all the coverage you need is to work with a professional, who can advise the best providers and products that are right for you and that will give you peace of mind should anything happen.
Overall though, there are three main types of policies that should be included in your plan:
- Life Insurance – unique in terms of protection policies in that it will only pay out upon death of the policy holder. This type of insurance policy pays out a lump sum to provide your family money to cover any expenses they may have.
- Critical Illness – If you are diagnosed with a condition covered by your policy, your provider will pay out a tax-free lump sum so you can allocate however much you need to cover expenses while you recover.
- Income Protection – Similar to critical illness, but a wider variety of conditions are covered and payouts are made regularly, rather than in one lump sum.
Ensure you have an update will
The best way to ensure your wishes are carried out the way you wanted after you die is to create a will. This will guarantee that your wealth and assets will go to who or where you specified. There are other important things you can declare in your will, such as guardians for your children, so it’s important to put one in place.
An estate plan, contrary to popular belief, is not a practice reserved only for the ultra-wealthy. In actuality, they are relevant for a majority of the population thanks to rising house prices and the Inheritance Tax (IHT) nil-rate band freeze. Through estate planning, you can minimise a lot of this potential financial burden, but the best way to do that is through a financial professional.
Be prepared, come what may
With the state of the economy the way it is, one surefire way to feel secure with your finances is to consult an independent financial adviser. The experts at Dental & Medical Financial Services can help you find the right coverage that will help you feel secure that your family will be provided for if the unthinkable happens. For help building or reviewing your wealth protection plan, get in contact with us today.