The Importance of Financial Protection

We insure a lot of things in our private lives. We have contents and travel insurance, phone and car insurance but we often forget about the most valuable asset – ourselves.

Figures released by Swiss Re earlier this year revealed that the difference between the level of cover currently held by UK consumers and the amount they would need to be fully covered — known as the protection gap – currently sits at more than £2trn.

Concerns have been raised that many UK consumers have prioritised protecting their mortgages, due to a property often being their most valuable asset, at the expense of other policies that could be more suitable for their circumstances.

By asking what clients want from their policy, rather than basing the conversation on how much their mortgage costs, clients were often surprised to learn that other forms of protection, outside of a life policy lump sum pay out, were a better fit for their needs.

As the older generation continues to live longer and couples leave it later to start a family, according to the Office for National Statistics (ONS), there are up to 1.3million people who are financially responsible for both younger and older family members. The dual responsibility held by this so-called “sandwich generation” makes it all the more important to consider how loved ones would cope should you become incapacitated through illness or, worse still, die.

Some UK consumers were also found to have a misconception of the insurance industry, with many thinking only 75%-80% of claims were paid out. Recent figures show this is actually closer to 97.3 per cent of claims, proving that the insurance industry does in fact ‘care’.

Nathan Mead-Wellings, Director at Finura, comments: “Some insurance cover is always better than none however, as a firm, we try to educate our clients on the importance of protecting more than just one element of their portfolio. Whilst having all risks mitigated would be the ideal solution, in most cases that is typically not affordable. Our aim at Finura is to strike the right balance between value for money and protecting the most appropriate elements of our clients’ lifestyles.”

Whether you are looking to protect debt, lifestyle, or both, Finura can audit your current personal and work insurance and provide solutions to ensure that you and your family are comprehensively protected in the most tax efficient and cost-effective way available. Where possible, Finura only uses insurance services that have been awarded a 5-star Defaqto rating.

If you would like to talk to an adviser about your insurance policies, please contact Finura.

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Sources: https://www.ftadviser.com/protection/2019/05/07/advisers-urged-to-change-how-they-talk-about-protection/
https://www.theguardian.com/society/2019/jan/14/sandwich-generation-caring-older-younger-relatives-mental-illness

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