Covid-19 has changed the world as we knew it. We are entering a ‘new normal’ as many aspects of life adapt, so that we can all live with this invisible threat. How does that effect how we manage our own finances though? Unividual's Henry Vanderhoest explores a rising trend in people looking to protect family income and inheritance.
More about income protectionThe outbreak of Covid-19 at the beginning of this year no doubt will have changed the world as we know or knew it. As we enter a ‘new normal’ many aspects of previous normal life will have to adapt to live with this new invisible threat. Regardless of work or life changes, sound financial planning will remain essential. Yet according to recent FCA figures, only 8% of the UK population sought out financial advice in 2019. Many people in the UK now face significant economic hardship because of Covid-19. Anyone facing new and difficult financial challenges need to be aware: professional advice is available especially during changing times. Firms like ours are ready and waiting for when you need us.
Help with retirement planning, investments and mortgages are common elements of financial advice that people are familiar with. However, we have already seen that the current world we live in has created an influx of people looking for specific areas of financial advice. People are starting to realise how vital it is to plan where your wealth goes when you pass and to protect family income in the event of sickness. Our financial advisers find that clients, at first, do not always understand the importance of implementing family protection within their financial planning. This compares with the national correlating statistic that less than one third of the UK population have life insurance, which is a policy that protects your life and pays a lump sum to your loved one in the event of your death. This helps them to pay the bills so they can afford to enjoy their life without your income stream. Even though life insurance is one of the cheapest protection products available, many people believe it is not worth the monthly premium because they believe that, like income protection, it will simply not be needed. But as Greg says, the financial adviser I work alongside, “insurance is one of those funny things, someone never thinks they are going to need it. Then when the unthinkable happens they wish they had it, only it will be too late.” Millions of people don’t have life insurance or adequate protection, that is not the sort of crowd you want to be part of.
For nearly a year now we have witnessed a global pandemic incapacitating and killing countless people, indiscriminately. Corona sweeping through the world at the rate it has, sadly demonstrates that no one is immune to chronic illness. This is already leading to a shift in attitude where people have started to financially prepare more for the future to mitigate their family risks. If you or your partner becomes unable to work or even dies during this pandemic with no financial protection or planning in place, this may leave you or your family in serious but avoidable financial difficulties. The sad fact is that at this moment in time many people globally will have family members that may die without financial protection in place leaving their loved ones financially vulnerable.
I am very proud of the work our business plays in ensuring our clients do not find themselves in these specific situations. If this pandemic is currently making you rethink your financial position, and consequently you would welcome professional support and advice, then know we are here for you. You can find out more about how to protect yourself from risks or head over to our free financial planning guides where you can find a wealth of information to get you started on planning your finances. If you then have any further questions or would like to set up a meeting with one of our financial advisers, please do get in touch.
Author: Henry Vanderhoest
Editor: Cherie-Anne Baxter
Date: 12.02.2021
