The easiest form of protection to understand is mortgage protection. It is simply a product that makes sure your mortgage is paid off in the event of your untimely death. It’s compulsory, so that your mortgage provider is not left out of pocket if you are no longer here to pay the mortgage.
We know what it does when a particular event happens.
But how many people extend this view beyond just mortgage protection to life protection, serious illness cover or income protection?
The result may be slightly different – a lump sum v a regular payment but the reason that we need it is the same. The occurrence of an unforeseen event. This is not always an early death. It can also be an illness, injury or accident which leaves you in a financially challenging situation.
There are two things here that people should understand to fully appreciate the value of protection. These give meaning to what the product provides and why you may need it.
Likelihood of an event happening
It’ll never happen to me is not a good starting point. The risk of a serious illness is with us all. The impact of it stopping us in our tracks is one that we should plan for. The incidence of serious illness and injury has risen hugely over the past number of years. For example, in Ireland and in Europe about 1 in 3 people will develop cancer at some stage in their life. The great news is that due to better treatments and picking up cancer earlier, more and more people are surviving cancer. Therefore, a serious illness can still have a dramatic impact on your lifestyle and financial situation. That’s why looking at how you would manage is vital before such a situation would occur.
This handy tool will help you better understand the risk of an unforeseen event happening to you.
Changing patterns of claims
It’s often only when we need to make a claim, the reality of what we can claim for comes to light. But before you take out any product you should look closely at the claim’s details. This is really the product you are buying. That safety and security that you can claim to help assist you and your family financially.
From reviewing the various life company* claims data for 2020, there is a consistency in many regards. The leading causes of claims continue to be cancer, cardiac and respiratory issues. There is a difference in the types of cancers between women and men, but the average age of claim is around 50 years.
A big shift in 2020 was in income protection claims. For many years, orthopaedic reasons were stated as the main reason for income protection. But this year, this has dramatically shifted to psychological reasons. This has been attributed to the impact of Covid-19 and this fallout will be felt for many years to come.
Protection cover can vary – from protecting your income, your home, your family and/or your business. But with the right cover in place, you’ll always have peace of mind.
At Quintas Wealth Management we can assist you in assessing your needs. We’ll help you understand what the best options and product mix for you are to ensure that you’re preparing for whatever the future may hold. Just get in touch!
*Source: Irish Life, Aviva, Zurich 2019/2020 claims data published online.
29 June 2021