Protection
Many people avoid analyzing their protection needs as it involves thinking about unpleasant situations. Nevertheless it is a key part of the financial planning process.
The most common reason for arranging protection plans is to ensure that your family can maintain their standard of living if you die or suffer a serious ilness. Generally, your need will be greatest after you start a family and will decrease over time as your children grow and become independent, although income replacement cover can be important throughout your working life, particularly if you’re self employed. However, protection planning can also serve other important purposes. For example, if a major portion of your estate consists of illiquid assets, life insurance can provide funds for your heirs to pay inheritance tax without liquidating those assets. For business owners protection considerations are ever wider, with the need to ensure that the death or serious illness of a key individual doesn’t result in the financial ruin of a business, or to ensure that a shareholder’s stake can be bought back at a fair price on death, so benefitting both the business and the family of the deceased.
While we would all like to be protected against all eventualities, cost is inevitably a factor, so it’s essential to sit down with an adviser who can talk you through all your options and help you to establish the right protection planning for you, your family and your business based on your budget.
