Wealth protection policies — Critical Illness cover, Income Protection, and Life cover — are all designed to provide peace of mind that your family is taken care of financially should something happen to you. Have you considered changing your approach to protection? Now is the right time to get started.
This does not constitute advice and advice should be sought in all instances before acting on it.
It was recently announced that all full-time, part-time, and locum NHS and public health workers (including GPs, dentists, retired staff, and second and final year students) who volunteer to work on the frontline during the pandemic will all be eligible for a £60,000 lump sum payment in the event of their death due to COVID-19.
This life assurance scheme goes a small way to highlight the vital work frontline healthcare professionals are doing – but is this sum enough for most families in the long-term?
How does this government scheme help your protection planning?
If the covered worker is the main breadwinner in the family, a one-time payment of £60,000 won’t go that far. For many healthcare workers, though, this is a great starting point for working out what coverage is needed.
This scheme will only continue while the pandemic runs its course so the best plan of action is to ensure you have a protection policy in place that will help bridge the gap between what coverage you might already have — either through this scheme or through your work — and what your family will need to be supported financially if you get sick, injured, or pass away.
If feasible, it’s ideal to secure all three types of protection policies.
Each type of policy serves a different purpose and will help in distinctive ways.
Should you fall ill or get injured, Income Protection (IP), which is tied to your income, will pay out a portion of your gross income while you can’t work and you can submit multiple claims throughout the life of your policy.
Critical Illness cover pays out in one lump sum and you can only claim once. Plus, there are fewer conditions covered compared to IP.
Life cover is for the worst-case scenario. A payout is given as one lump sum after the policy holder’s death to help cover their family’s financial needs.
Has your attitude to protection changed?
It’s not the most cheerful topic, but it’s important to think about how your family would survive if your income is suddenly lost.
It’s especially crucial for healthcare workers to decide which policies they wish to pursue because they’re in high demand at the moment and it might take longer to get policies secured and set up.
Seek financial advice
How much coverage you’ll need is unique to each individual and your specific circumstances. This is where meeting with your financial adviser is beneficial.
Your adviser is well aware of your situation and will know all about your finances, your responsibilities to your job and your family, and what exactly is at risk without the right protection in place.
IFAs can conduct a protection audit and help you navigate the process of securing the right coverage and incorporate your policies into your overall financial planning strategy. Don’t hesitate to get in touch with us to schedule time to go over your wealth protection policies today.
Considering a wealth protection audit?
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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.