How do you make protection sexy?

11 July 2018

Have you heard the one about the life assurance salesman who…no, nor have we, and I am sure it wasn't funny anyway!

Writing about life assurance, health cover, protection benefits and the like is not going to be an exciting read. Indeed, some of you may already be ready to flick off this page…but don't please. We have a few points to note that are not 'sexy', but nevertheless important for many to consider.

In many aspects of financial planning, the solution to a need may be met by more than one source. In financial planning, an example might be a planned pension income that will come from the combination of State Pension income, an old employer's scheme and a current auto-enrolment pension scheme you and your employer are paying into. But did you know that the employer's pension and the auto-enrolment plan usually provide some death benefits to your partner or other beneficiary? Just a point of how protection might already be in place and you may not realise it.

Why might you need protection?

  • Protection for the family in the event of your death
  • Mortgage repayment in the event of death or critical illness
  • Inheritance tax protection
  • Medical costs
  • Protection of future income, e.g. being able to cover your regular bills if you were unable to work because of illness or injury

Indeed, this list could be pretty lengthy in terms of the need for – or combination of needs for - protection.

Cover for free?

Some don't like paying for protection, and you may get it free through an employer's scheme, such as a death-in-service arrangement or ill health cover. But do you know what you could be entitled to and when is the last time you checked? If you have Private Medical Insurance from your employer, you will know that this is taxed as a benefit-in-kind, but the death-in-service arrangement is not taxable.

And those old pension pots? Did you know that you can usually make a nomination on these as to who you would like to benefit from their values? It's usually free to make a nomination and usually well worthwhile.

Cover not for free?

Usually everything else. But before you run away, there are ways of making cover cost effective in many situations. We would need to understand your circumstances and what you are trying to achieve, to make suitable recommendations. And using a word from earlier, it's likely to be a combination of arrangements from more than one source that creates a low cost solution.

Please do speak to the team at Chapters Financial about your protection needs and we look forward to creating a solution to the many varied ways that protection can be so important.

Keith Churchouse FPFS

Director, CFP Chartered FCSI

Chartered Financial Planner

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899