Now that you have a new member of the family, you might be thinking of how best to protect them, should the worst happen to you. Think of insurance like a safety net. It could pay out if you were unable to provide for your family, if you were ill or passed away.
One of the main insurances is Life Insurance – this will pay out a cash lump sum upon your death, which your family could use to pay the remainder of the mortgage, or funeral costs. Many life insurance policies also pay if you are diagnosed with a terminal illness that only gives you a year to live. Through such a tough time, your family would not have to worry about their financial situation.
Make a Will – Ensure that your wishes are set out clearly for those you leave behind. It will help to avoid a lengthy probate process and there will be no question of your wishes. In a will you state who will take care of your children in your absence, which will prevent them going into the care system. You also will bequeath your estate so that your family are provided for.
Critical Illness – this can provide you with a lump sum payment if you can’t work for medical reasons, such as a heart attack, certain types of cancer or a stroke. Different insurers have different lists of medical issues that are covered by their policies, so it is always worth searching around for the most comprehensive cover.
Income Protection – this will provide a regular payment if you can’t work while you’re ill or recovering from an accident. It will continue to pay until you return to work, retire, or until the term of the policy ends (if you decide to purchase a policy that will pay out for 2 years it will generally be a lower cost than a full life policy). There is often a deferred period before payments start and the longer the deferred period, the lower the monthly premiums.
Family Income Benefit – designed for families, it will pay a regular monthly payment to your family if you die or become terminally ill. This type of insurance can provide peace of mind, knowing your loved ones will still be able to cover monthly expenses if you’re no longer around.
