Protection
Protecting your family, your home, your income, your health and your business are all issues faced by us all.
Determining the actual levels and type of protection that you need is really determined by several factors:
- Your age
- Your income
- Do you have any dependents?
- Do you have any debts, mortgages, loans etc?
- What do you feel is the perceived risk?
Age: if you are young, single with no mortgage or dependents, you may wish to protect your income in the event of ill-health, but probably won't consider life assurance particularly important.
Income: In a perfect world, we would insure ourselves in the event of all of the above, however we have to be realistic and decide how much we are prepared to spend on protection plans.
Dependents: The protection needs of someone with dependents will be greater than someone single with no commitments.
The definition of 'dependent' is not just restricted to young children, it could be adolescents, teenagers at University through to infirm/elderly dependents in need of care.
Equally those who have separated/divorced and receive maintenance from an ex-partner for their dependent children should consider what would happen in the event of the early death of their ex - how would the loss of the maintenance be covered?
Liabilities/debts etc: Your mortgage loan is usually your single largest debt, and should be as a minimum protected in the event of your death. Consideration should be given to other debt too, total up your loans and credit card debts. What would happen to them in the event of your death, serious illness or loss of income?
Perceived risk: In considering your own protection needs, it could be that what is recommended and what you consider to be important may differ. Again it could come down to budgeting - how much you prepared to pay to protect yourself and your family will probably be the single most influencing factor in the decision making process. Or it may simply be that you consider some aspects of your circumstances a higher priority for protection than others. There are no right answers!!
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