When to review the protection you have in place

29th November 2018

Whether you are an individual or a small business, it’s important to review the protection you have in place as often as you would review your home or car insurance. No one wants to find out that the protection they had in place was not suitable, and it’s likely that that will only happen when it’s too late and you’re in a tricky situation. This is especially important when it comes to Life Insurance, for one simple reason – life changes all the time.

 

The protection you have in place should change, to some degree, with every major life event. Regularly reviewing your Life Insurance will assure that your loved ones are always covered. In most cases, you will be aware of the major factors that could affect the protection you have in place. However, there may be some events that occur unexpectedly. Below are three scenarios in which it would be wise to review the protection you have in place.

 

Scenario 1: Moving Home

If you currently own your own home but are looking to move into a bigger home – this is a key time to review the protection you have in place. As a Contractor, you do not receive the same benefits as ‘regular’ employees. If you fall ill and can’t continue to work, you would not receive any sick pay. For this reason, it’s important to review your Income Protection to ensure that you can continue to keep up with mortgage repayments if you are unable to work. In addition, make sure you review your Life Insurance too. It’s likely the cover you originally took out was with your current mortgage repayment in mind. If you have moved into a more expensive home or downsized, you are likely to need to revise the amount of cover you have taken out so that a Life Insurance payout will cover the remainder of your mortgage.

 

Scenario 2: Expecting a baby or growing family.

A report by LV found that the cost of raising a child from birth until their 21st birthday is as much as £231,843 – that’s more than the average cost of a house in the UK. If you are expecting a baby or growing your family you may need to speak to an adviser to make sure your Life Insurance will cover the cost of raising a child. That way, if anything did unfortunately happen to you, you can rest assured that your family would be financially secure during a difficult time.

 

Scenario 3: Salary change

If you have been promoted, started a new job or reduced your working hours – this is another key time to review the protection you have in place. Any time you have a change in salary, you need to make new financial decisions. Do you want to leave more money to your family to ensure that they can maintain the security and lifestyle they currently enjoy from your income? Similarly, if you are receiving a lower salary than before and want to reduce your outgoings, you may want to reduce your cover.

 


 

In life’s key moments be mindful to review the protection you have in place. You can do so through a short conversation with one of our expert advisers, and feel confident that you’ve got the right protection for you.

 

All content is accurate at the time of publication

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