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  • Writer's pictureDarren Pestell

Protecting your biggest asset…. It’s you!

Updated: Jul 10, 2023

What’s the risk?

The greatest risk to building wealth and a financially secure future for you and your family is an interruption to the asset that creates that wealth and security….

That asset, for most people, is you!!

Most of us live by the mantra that the worst will not happen and thankfully often that’s true, but the statistics can suggest a more cautionary approach should be taken.

LV have a useful risk reality calculator that can provide some interesting insights… below is a typical example of the results but is worth running your own personal details through it. Risk Reality Calculator | LV=

Results for 40 year old, male, non-smoker with planned retirement age of 65.

As can be seen from the above illustration, statistically the chances of an interruption to your financial stability are possibly greater than you might have expected.

Preparing for the unexpected… the big 3

Having established that perhaps some cautionary protection should be part of your financial plan, the question is, what to protect?

There are a wide range of protection policies available across the marketplace but the principal big 3 are:

  1. Income protection – provides a tax-free income in the case of long-term illness or disability that would prevent you from working.

  2. Life insurance – provides a lump sum tax-free payment on death, often used to pay off debts or providing for dependents.

  3. Critical illness - provides a lump sum tax-free payment on becoming critically ill (typically heart attack, strokes & cancer), often used to pay off debts or providing for dependents.

The big 3 are available in all sorts of shapes and sizes, therefore allowing everyone to find a suitable solution for them and their circumstances.

How much cover is needed?

Clearly the answer to that question is unique to each person and their situation, however there are some key considerations to take into account when considering the various solutions available:

  • What is my current income?

  • How much of it is committed to essential expenditure?

  • Who depends on me and my income?

  • What level of secured debt do I have?

  • What level of unsecured debt do I have?

  • What cover do I already have in place?

  • What budget do I have available to spend?

The answers to the above will be different for all of us. Getting advice to help understand the best way of ensuring you and your family are protected should the worse happened, is a fundamental part of the financial planning process.

If you’d like more information on building a protection strategy or a review of your existing protection get in touch so we can put a plan together for your financial future.

Our services relate to certain investments whose prices are dependent on fluctuations in the financial markets beyond our control. Investments and the income from them may go down as well as up and you may get back less than the amount invested. Past performance cannot be used as a reliable prediction of future performance.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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