This does not constitute advice. Professional advice should be taken prior to acting on any part of it.
Dental and Medical Financial Services Limited is an appointed representative of Best Practice IFA Group Limited, which is authorised and regulated by the Financial Conduct Authority.
Financial planning is more than just building your wealth, it’s about protecting it, too. Many people have a future retirement plan for when things go right, but fail to account for the possibility of things going wrong. A life insurance policy can help to ensure loved ones are protected in the event of an unexpected death.
In order to make sure you will have enough money to provide for your family if you pass away, you will need to work out exactly how much financial support you provide currently. Figure out how much your living expenses are, along with any outstanding debts, like a mortgage, that you might leave behind. If you have a partner and/or a family that depends on your income to survive, it should be your goal to ensure their lifestyle won’t change even if you’re not around to provide for them anymore.
Financial protection when it’s needed most
Life insurance is designed to protect your family after you’re gone. Insurance policies pay out a cash sum to your beneficiaries if you die while being covered. You can customise cover so you choose the amount you need as well as how long you need it for. Premiums can be paid monthly or annually, depending on the policy. The price you pay for a life insurance policy will depend on a number of things such as:
- the amount of coverage you need
- the length of the policy
- your age
- your health and lifestyle
- if you are a smoker.
Life insurance acts as a safety net for your loved ones so that they won’t struggle financially if you pass – a small favour during a difficult time. It provides peace of mind to you and your loved ones knowing that they will be provided for no matter what happens.
Coverage needs change over time
As with many aspects of financial planning, you will need to revisit your insurance policy whenever your life circumstances change. This will keep your coverage sufficient and consistent with your lifestyle. If you fail to update your policy then you run the risk of being under-insured at a time when your family is most in need.
As a doctor or other medical professional, your life will continually change as you move through your career and take on new challenges. These different stages in life require different levels of coverage. If you buy a home and now have a mortgage, your needs will change. If you get married or divorced, your needs will change. If you have children, your needs will change.
Two types of life insurance
There are two overarching kinds of life insurance: term life and whole-of-life, which both have variations. The most affordable and simplest is term life insurance because it is straight-forward protection and there is no investment element. It pays out a lump sum if you die while your policy is in effect.
A whole-of-life insurance policy, on the other hand, provides you with cover throughout your entire lifetime. Upon the death of the policy holder, your insurance provider will pay out a (usually tax-free) lump sum to the policyholder’s dependents.
Whether you’re looking to set up a financial safety net for your loved ones after you pass or simply wanting to add coverage to the plan you’ve already got, picking the right insurance is essential. Obtaining professional advice and learning about the products available will help ensure you have exactly the kind of coverage you need.
Dental and Medical Financial Services provide medical and dental professionals with an efficient and stress-free service throughout the financial planning process. For bespoke advice that takes your personal and professional needs into account, get in touch with the experts today.