We understand that life can be unpredictable; Four Wealth Management can help you to prepare for every possibility in life. Our advisers can review your current protection policies and where necessary recommend the best policies to protect you and your family in case of the unexpected. This will provide you with peace of mind knowing that your family are well looked after and financially secure.
Have you ever considered what will happen to you financially if you become too ill to work?
When considering the financial impact of not having an income due to a severe illness or injury, you should also take into account potential medical and nursing home costs. The average weekly cost of a nursing home in the UK is £841 a week*, costs do vary depending on the type of care you need, the frequency of the care and your location.
Temporarily using your savings to replace your income is risky as you may not know how long you are unable to work for or you may underestimate the costs of health care. This could leave your savings depleted and mean you have little or no inheritance to leave your loved ones. Not leaving yourself with a sufficient cash reserve also leaves you and your family vulnerable should unexpected costs arise in the future.
You may be eligible to statutory sick pay, which is £92.05 per week (2018/19 Tax Year) paid by your employer for up to 28 weeks. However, this is unlikely to cover your bills and allow you and your family to maintain their current lifestyle.
If life does not go to plan, having protection policies in place will help provide financial security for you and your family which will help you to maintain your existing lifestyle.
Our advisers can help you to look into which of your current insurance policies will pay out if you were to fall ill. It is complex to provide for your family and dependents as well as funding potential long term care costs.
Did you know protection insurance could help you and your family if you lose your ability to earn an income?
Protection insurance policies can be tailored to the financial needs of you and your family to cover ongoing living expenses, debt and mortgage repayments and other expenses such as education.
Our financial advisers can help you explore the protection options available to you and recommend suitable policies for your needs.
Do you need income protection insurance?
In the UK, one million people per year are unable to work due to a serious illness or injury†. If you would be unable to pay your bills without income from work, income protection insurance might be worth considering. You are most likely to need income protection insurance if you are self-employed or if your employer does not provide additional sick pay.
What is income protection insurance?
Income protection insurance is a long-term insurance, which can provide you with a monthly income if you are unable to work due to illness or injury. You will receive a regular income until you retire or are able to return to work. It is important that you choose a policy tailored to your individual circumstances; a Four Wealth Management adviser can help with this.
The cost of income protection varies depending on factors such as your age, job, health, waiting period before the policy pays out and the illnesses covered. Premiums are generally lower when you are younger.
Critical illness insurance
Critical illness insurance can pay you a one-off lump sum if you have a specific serious illness; your adviser can help you determine if this is necessary. Critical illness insurance is often cheaper than income protection insurance; however, it only covers a limited range of illnesses.
Pensions and ill health
If you do not have protection policies in place, your pension may be able to help you financially if you are unable to work due to illness or injury. However, this depends on your age, how ill you are and the rules of your pension scheme.
Our advisers can find out what benefits you are entitled to from your existing pension schemes, should you fall ill.
Early retirement
You may choose to retire earlier than you were planning to due to ill health. If you are over the age of 55, you will be able to access your pension straight away. You may be eligible to receive a state pension from the age of 65.
Taking an ill health pension
You cannot normally access a pension until you are 55, however if you are ill, you may be able to take your pension under the same rules as over-55s.
If you are seriously ill, then the whole amount of your pension could be released to you as a tax-free lump sum, provided you are under 75 and have not withdrawn from your pension before.
It can be hard to think about finances when you are facing a health problem, therefore, it is best to ensure you have protection policies in place as soon as possible to provide you with peace of mind. It is also important to review your protection policies regularly to determine whether they are up to date and still suit your circumstances.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.
*Which, Care home fees, 2018
† ABI, Welfare reform for the 21st Century, 2017
