News details
It's critical to get insured
4/12/2010
Alok Dhanda explains why critical illness cover is a form of financial protection that nobody can afford to ignore.
The prospect of being unable to work due to critical illness or injury is not something many people in the UK like to spend time thinking about. However, nobody can predict what is just around the corner. It is so important to plan for the worst so that, if the unexpected happens, you and your family are financially protected.
From celebrities such as Jade Goody, who died from cervical cancer last year at only 27 years old, to local stories such as the passenger who suffered a horrific accident on the tracks of a Metro station last week, it is clear that illness or injury can strike any of us at any time.
Visit any cancer ward around the country and you’ll see so many people, including those under 40, whose lives have been turned upside down. Just this week we heard the news that tennis champion Martina Navratilova has being diagnosed with breast cancer, proving that nobody is immune to illness - not even fit, healthy people who eat well and exercise regularly.
Statistics from Cancer Research UK show that there are more than 293,000 new cases of cancer diagnosed each year in the UK and one in three people will develop some form of cancer during their lifetime, with even more falling victim to heart attacks and strokes. Last year around 27,000 people in the UK suffered illness or injury so severe they had to leave work permanently. However, despite these startling facts, more than 80% of the population still don’t see the importance of taking out critical illness insurance.
It is vital that people of all ages review their personal portfolios and look at how they would pay their bills, mortgages and other debts should they find themselves in a position where they can’t work.
There are plenty of companies who offer critical illness cover, providing you with the peace of mind that, should you fall ill, your basic expenses will be covered. Bupa, for instance, offers a choice of three cover options to suit your long term financial needs, covering 37 specified illnesses and operations. An Independent Financial Adviser will be able to advise you on the best level of cover for your personal circumstances.
The principle is straightforward. In the event of an illness being diagnosed, the insurance company will pay out a tax free lump sum after a survival period. Critical illness insurance can be written jointly with life assurance and a given sum will be paid out on the death of the insured, or in the event of the critical illness, under the one policy.
I would urge every family to make this a priority and take out a critical illness plan now. Have you given thought to how your family would survive without your income? This year alone, several of my clients have already claimed on their critical illness cover, so there is no excuse to put your family at risk by not putting a sensible plan in place.
Self-employed business owners or company directors should also consider what they would do should they lose a director or key member of staff through death or a critical illness, as this can be very damaging and could potentially bankrupt a business.
A key-person insurance policy can protect the company by paying the costs of a temporary replacement, meeting the costs of recruiting a permanent replacement and covering the cost of death or incapacity of a key member of staff.
Interestingly, most of us would never contemplate not taking out house insurance or car insurance, so it is time we started to see the importance of protecting our most important asset, our lives.
For further information on how Alok can help you with your personal or business planning needs, contact Dhanda Financial, 52 Dean Street, Newcastle upon Tyne, NE1 1PG, telephone 0191 255 8960 or email alok@dhandafinancial.com
