Quick Guide to Protection Insurance

Speak to a Mortgage Advisor

What is Protection Insurance

So put simply, in the unfortunate event of your death, you become critically ill or unable to go to work due to an accident or illness. Protection insurance, such as life insurance, critical illness cover and income protection, is there to support you in such events financially. Ensuring you and your family are financially secure and do not have to worry about money when such events occur.

Most of us have heard about life insurance and that it pays out if you die, but there is much more to protection insurance. Remember, it’s death that is most likely ‘NOT’ to happen, but according to the NHS, statistics show that 1 in 2 people will develop some form of cancer during their lifetime. So, a little expertise can go a long way when sorting your protection insurance, instead of just using your whole budget on a significant life insurance policy that you may never benefit from.

hand shielding paper cut outs of people

Should I get Protection Insurance?

There are many reasons why we recommend getting protection insurance in force. Here are nine reasons why we recommend you obtain some form of protection insurance, which could be life insurance, critical illness cover or income protection.

  1. You have dependants/children
  2. You have a partner who relies on your income to pay bills 
  3. You have a mortgage
  4. To cover funeral expense/the cost of death
  5. You don’t get sick pay with work
  6. You are self-employed
  7. People are financially dependent on you 
  8. There would be a financial impact on your loved ones in the event of your death.
  9. To cover the inheritance tax bill. 

Protection Insurance can provide a lifeboat for yourself and the people who depend on you when they need it most. 

The Different Types of Protection Insurance

Not having any prior knowledge of the world of protection insurance, it would seem every policy is the same; if you die, you get a pay out, right? Well, you’d unfortunately be mistaken; protection insurance is much more than covering just death.

Life Insurance

If death occurs, life insurance is there to pay out and support your family and loved ones, to cover the costs of death, wages, mortgage payments and so on. Protex Financial do a simple guide to life insurance if you want to learn about all the different elements of life insurance.

Critical Illness Cover

Critical Illness Cover is an insurance system developed to help people financially when suffering from a Critical Illness, such as Cancer, Heart Attack or Stroke. We understand that it can be an upsetting and worrying time when you or a family member have been diagnosed with a Critical Illness; you don’t need to add financial troubles to that.

Income Protection

If you cannot work due to illness or accident and your employer won’t pay sick pay, income protection can deliver you an income of up to 70% of your salary.

Mortgage Protection

The one thing we all need but never discuss. When taking on debt in the form of a mortgage, it is essential to make sure you have that debt covered so that if something were to happen, you would be protected financially. This is why we always recommend mortgage protection to protect you and your family in the event of a death. This protection product will help keep you in your home if death or a critical illness occurs. 

Whole of Life Insurance

Whole-of-life insurance policies pay on your death, no matter when that happens. This means there will be a pay out at some point, premiums will be higher than for a term life policy, and you will need to keep paying them until your death. 

Over 50’s Insurance

An over 50’s plan is sometimes recognised as a funeral plan. This type of plan can be one of the most expensive, as yes, it’s like a whole life insurance policy, but it can also offer cover without needing a medical application. 

How Much does Protection Insurance Cost?

The price of protection insurance will be determined by a few elements, which include the following…

  • Amount insurance you need
  • The term time (amount of time you want to be insured for)
  • Your medical background
  • Your age
  • Whether you smoke
  • Job occupation
  • What type of protection insurance do you need (see above) 

These are some of the reasons your insurance is the price it is, and we always recommend not to compare your policy with your friends/family’s insurance; it is a very personal product and is always based on your circumstances.

Summary

In summary, protection insurance protects you and your family financially should the worst happen. The price usually reflects your budget, and the advice on what insurance to get is 9/10 free of charge, so even if you’re just casually thinking about insurance, it’s 100% worth exploring the idea of protection insurance. 

Author – Simon Walton – Mortgage & Protection Advisor

Company – Protex Financial

Speak to a Mortgage Advisor

Get in touch to speak to one of our Specialist Mortgage Advisors.