Wealth and income protection and preservation are among the most important aspects of financial planning – ensuring your years of hard work, saving, and investing don’t go to waste.
This does not constitute advice and advice should be sought in all instances before acting on it.
A solid wealth preservation plan encompasses a variety of strategies that will help protect you, your family, and your business from any financial consequences.
Part of our role as financial advisors is to help support your needs and goals for the future, catering to your individual circumstances. However, there are key areas every individual will want to touch upon in their own plan.
Life Insurance
Life insurance (or ‘life cover’) is designed to make sure your family has the money they need if you were no longer around. Its primary function of life cover is to replace the income that would no longer be earned in the event of the death of the insured.
Pay out is in the form of a lump sum and normally will help your family keep up with the mortgage and bills or anything that you would usually cover for your dependents.
Critical Illness Cover
Critical Illness (CI) aims to help minimise the financial impact on you and your loved ones in the event you become ill or injured.
Often, you will need to take time off for recovery or if you pass away during the length of the policy, the money (paid out in a lump sum) could be used to help fund the mortgage or rent, bills, or even groceries, providing you and your family peace of mind during a difficult time.
You can only make one claim, though, and you must make certain that your policy covers the illness before you can do so.
Income Protection
Similar to Critical Illness, Income Protection (IP) will be able to keep your finances healthy even if you yourself are not.
What sets it apart is that IP is tied to your income and will pay out in monthly instalments up to 65% of your gross income while you are unable to work.
You can make multiple claims throughout the term of your policy and payments can continue until retirement. The medical situations covered with IP are also broader than Critical Illness cover.
Other options
Other than the trifecta of wealth protection, there are other options you may wish to pursue for full coverage, such as private medical insurance and long-term care insurance.
Private medical insurance covers the costs of private healthcare, from diagnosis to treatment and provides you the ability to access health treatment quickly and efficiently.
Long-term care insurance offers financial support should you need to pay for care assistance for yourself or a loved one. A variety of services designed to meet a person’s health or personal care needs during a short or long period of time are included.
These services go a long way to help people live as independently and safely as possible even after they’re no longer able to perform everyday activities on their own.
Don’t forget about wealth preservation
Besides protecting your wealth, the other half of the equation is preserving it. In order to do this, you will need to draw up a will to ensure your wishes are posthumously honoured and assign lasting power of attorney to a trusted individual who will make decisions on your behalf while you’re alive if your declining health prevents you from doing so.
Making the right financial decisions such as utilising the inheritance tax to its fullest and putting away some assets into a trust are other ways you can help pass down your wealth to your loved ones. It’s best to meet with a financial advisor in order to take advantage of these strategies, as tax law and legislation is complicated and ever-changing.
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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.