How would you survive if your income suddenly stopped due to long term illness and you couldn’t work again for several years or perhaps never return to work? Perhaps you cannot work in the medical profession again and may not want to take any job to make ends meet. You may have excellent sick pay benefits via the NHS pension scheme or your GP Partnership agreement but that may only see you through a few weeks or possibly 12 months but after that life would be much harder – state benefits will not allow you to enjoy the same standard of living you have now. I’m sure you’ve considered a life cover policy at some point to protect your mortgage, but that is only going to help those that you leave behind, and perhaps you’ve discussed critical illness but rejected it due to cost? These are very familiar conversations that we have every week with our Medical Professional clients but 2020 has been the year that people have rightly decided to take stock of their financial position and consider the “what if’s”. Sadly, none of us are immune to illness.
If you’ve got critical illness, then any financial liabilities could be paid off, but the cost of living doesn’t go away and, in some cases, could increase if you have long term sickness to deal with. Another key point is that you may have opted out of the NHS Pension scheme and given up the additional benefits you enjoyed as an active member or you have been out of the NHS for a period of time and your sickness benefits have significantly reduced.
At Tempus we believe financial protection is a priority and that income protection is an area that needs to be discussed with every working client. You may have surplus income that you want to put away for a rainy day or for retirement but should you be using part of the budget to put in place a comprehensive suite of financial protection to give you the peace of mind to get on and enjoy life – yes is the simple answer.
LV= report that the average age for a claimant is 46 for men and 45 for women and that in 2019 they paid out 94% of all new claims. They also stated in 2016 that the average length of a claim was over 7 years. So, as you move into your 40s you may be in a well-paid job, have a mortgage and young children and enjoy your lifestyle, but this is also when financial protection starts to increase rapidly in cost, which makes it more important that you seek advice earlier to get yourself protected before the cost becomes a barrier to making the right decisions.
It’s human nature to try to avoid giving too much thought to all the challenges life can throw at us, but it’s really important to ask yourself how your mortgage can be paid if you were off work for a long time, how would your family’s cost of day to day living be met and how much of your current lifestyle are you willing to forgo?