News & Blog

Family Protection

17th June 2019

You may feel that once you’ve got your mortgage loan it’s job done – but what about protecting the income stream(s) that will pay the mortgage, along with all the other family living costs?

Many of us recognise the importance of insuring our homes, mobiles and pets. Yet do we apply as much importance to protecting the wage earner(s) who fund the above costs and much more?

Whilst many may feel that an untimely death, serious health issue, or a major injury are highly unlikely, or way off into the future – do take a look at the details below, as you’ll see that it’s possibly more likely, and earlier in life than you think.

Surely, it’s better to have some protection insurance cover in place and not need it, than to really need it and not have it!

What’s best for you?

There are three main areas to consider, and within these, a massive array of options to suit your age, lifestage, and pocket:

Life Cover – this pays out a lump sum when you die, or a regular income in the case of Family Income Benefit.

Critical Illness Cover – this pays out a lump sum when you have a specified serious illness.

Income Protection – this pays you a percentage of your monthly income when you can’t work due to illness or injury.

My Employer will support me

This may, or may not, be true, so do check what’s on offer – as you may be duplicating your cover. If, for example, you are off work long-term, due to illness or injury, and there’s only support provided at the basic level, you may only receive Statutory Sick Pay, which is just £94.25 a week, paid for up to 28 weeks if you qualify. This is less than one-fifth of the average weekly wage of around £500, which could leave a big shortfall in a person’s finances.

Separately, if you are part of the 4.9m workers that are self-employed, then your exposure could be more pronounced!

Added value benefits

The insurance industry recognises that a payout upon claiming may be the initial driver in setting up a policy. But it’s also aware that there is a real benefit – for both the insured and the insurer – if a relationship is maintained throughout the policy term, as reflected by the following examples:

  • Incentives to keep healthy – including discounts off health club membership, and wearable technology to aid fitness.
  • Specialist support – such as GP/nurse helplines, telephone counselling, carer support services, consumer rights, early intervention and rehabilitation services.

Costs and payout likelihood

With such a wide range of options on offer, do talk to us, as you may be pleasantly surprised at how little a plan may cost. As for paying out claims, take a look at the figures at the bottom of this page.

As with all insurance policies, terms, conditions and exclusions will apply.

Could it happen to ME?

Leaving loved ones behind to pick up the pieces. 

– A current 35-year-old male has an average life expectancy of 86.

Across those years it’s probably likely that someone would suffer and survive a serious illness, long-term ill-health, or injury across the same period. If so, that would impact upon on the regular income stream, whilst the wage earner recovers.

  • A sizeable 2 million individuals are currently off work and deemed as long-term sick.
  • Going back 40 years or so, just 1 in 4 people survived their cancer disease for 10 years or more, nowadays it’s doubled to 1 in 2.
  • Since 1961, the UK death rate from heart and circulatory diseases has declined by more than three-quarters. 

97.6% of all Protection Claims are met

– equating to a sizeable £14.5m a day in payouts, and how that plays out for the key sectors are as follows:

Life Cover
98.69% of all Life Cover claims paid
Average payout of:
£81,269 (Term)
£4,740 (Whole of life)
Critical Illness
91.6% of all Critical Illness claims paid
Average payout of £70,926
Income Protection
88.1% of all Income Protection claims paid
Average payout of £22,058

Get in contact with Gale and Phillipson for more information on how to protect your family.


Reference – BL065 – Jun – 2019

Sources:

https://www.gov.uk/statutory-sick-pay

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/may2019

https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/articles/whatismylifeexpectancyandhowmightitchange/2017-12-01

https://www.cancerresearchuk.org/health-professional/cancer-statistics/survival

https://www.bhf.org.uk/what-we-do/our-research/heart-statistics

https://www.abi.org.uk/news/news-articles/2019/04/protection-payouts-see-insurers-support-record-numbers-through-bereavement-sickness-and-injury/

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Gale and Phillipson Investment Services Ltd, Gale and Phillipson Advisory Services Ltd, Gale and Phillipson General Financial Services Ltd are all authorised and regulated by the Financial Conduct Authority (Reference Numbers 431387, 142752, 195080) and trade under the name Gale and Phillipson. Gale and Phillipson (SE London) Ltd is authorised and regulated by the Financial Conduct Authority (Reference Number 195522) and trades as Indigo Financial Advisors. Registered in England and Wales numbers 05409822, 02232959, 03751076 and 04077157. Registered office: Gallowfields House, Fairfield Way, Richmond, DL10 4TB. Gale and Phillipson (Herts) Ltd is an appointed representative of Gale and Phillipson Advisory Services Ltd, which is authorised and regulated by the Financial Conduct Authority (Reference Numbers 615821 and 142752 respectively) and trades under the name Gale and Phillipson. Registered in England and Wales number 08864945. Registered office: New Burlington House, 1075 Finchley Road, London, NW11 0PU. Robin Joyner Associates Ltd is an appointed representative of Gale and Phillipson Investment Services Ltd which is authorised and regulated by the Financial Conduct Authority (Reference Numbers 703337 and 431387 respectively). Registered in England and Wales under number 04823391. Registered Office: 30 New Road, Brighton, East Sussex, BN1 1BN. Gyr Financial Consulting Limited is an appointed representative of Gale and Phillipson Advisory Services Ltd which is authorised and regulated by the Financial Conduct Authority. (Reference numbers 811525 and 142752 respectively) Gale & Phillipson Advisory Services Ltd trades as Gale and Phillipson. Registered in England and Wales number 11334836. Registered Office: Level 1 Brockbourne House, 77 Mount Ephraim, Tunbridge Wells TN4 8BS.

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