Almost exactly one year ago, I wrote an article which started with a question: How would you and your family cope if you suddenly found you were unable to work and earn a living? What would you do if you were no longer financially secure?
Looking back, it seems almost prescient, but like everyone else I had no idea when I wrote it that it would be a scenario that would, all too quickly, become a dreadful reality for a great many people.
Most will have read that piece, published on November 21st 2019, thinking either that ‘it will never happen to me’ or putting it at the bottom of quite a long to-do list which got longer and longer as Christmas came and went.
And by the end of March this year, of course, it was all too late.
The reality is that a global crisis of the type we’ve lived through this year is extraordinarily uncommon. The last time the world experienced anything remotely like it was the Spanish Flu outbreak in the early part of the last century.
I hope, as I’m sure you do, that we will never experience anything like it again.
But if nothing else, this year has proved that it’s foolish to take anything for granted, and while it’s highly unlikely that it will be a global pandemic like Covid-19 that will stop you from earning an income in the future, there are other, more common but no less worrying things that might.
All other things being normal and aside from recession, critical illness is one of the biggest factors that contributes to loss of income within the workforce.
There are a number of specialist insurance policies that can help to support you and your family if you were to be diagnosed with a serious or terminal illness and find you’re unable to continue earning.
Statistics from insurer to insurer vary, but these figures from Legal & General give a sense of the range of common ‘claimable’ conditions and the policies that exist to protect against loss of income.
Across a range of policies that include life insurance, critical illness cover (also known as cancer cover), terminal illness cover and income protection plans, the most common conditions that can lead to a successful claim are:
Cancer (all types)
Heart disease
Chronic lung disease
Bronchopneumonia and pneumonia)
Motor Neurone Disease and other ‘wasting’ conditions
Musculoskeletal disorders
Strokes
Clinical mental health illness
There are differences in each type of policy, but broadly speaking most will pay out on diagnosis and the money you receive can be used for any purpose – whether that’s paying down debt to reduce your liabilities, meeting ongoing living expenses or paying for specialist private treatment.
Some policies also give you the opportunity to scale payments. These include increasing or decreasing term cover where your pay-out and premiums either start low and go up to reflect advancing age and increased health risk, or start high and reduce over time to reflect reducing financial liabilities.
In fact, the choices available in terms of the type of policies that are available are wide and varied and we would always recommend people seek advice from a professional adviser before making any financial commitment of this kind.
A reputable adviser will be able to assess your needs not just in the short term but also over the longer term, factoring in growing or shrinking families, changing life-stage liabilities and priorities like mortgages and education costs and potential health issues.
Regardless of the type and level of cover you might need, the one thing that is certainly clear from 2020 is that securing your financial future is not something that any of us can afford to put off until tomorrow – because as Covid-19 has proved, none of us know what tomorrow might bring.
So if you’d like to explore how you can make sure you and your family are financially secure in troubled times, why not get in touch for an informal chat and see how Oportfolio can help you to make the right choices for your own future.
Oportfolio Limited is an appointed representative of Primis Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority
Your property may be repossessed if you do not keep up repayments on your mortgage.
Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.
