Research has highlighted the fact that 60% of women with dependent children have no life cover. Independent financial adviser, Becky Hammonds of Willow Financial Solutions, explains the benefits of critical illness and life insurance.
Research by Scottish Widows has revealed that the majority of mums are unprotected financially.
Only 13 per cent of mums have a critical illness policy and according to a survey of over 5,000 adults in the UK. 60% of women with a dependent child have no life insurance.
Around 31% of mothers admitted that their household would suffer financially if they lost their income unexpectedly. While 25% claimed they could only pay their mortgage for a maximum of three months and 39% said they would have to use their savings to cover themselves financially if placed in difficult financially-challenging circumstances.
When asked how they would cope should they or their partners not be able to work for six months, 29% said they would rely on state benefits.
Every year 1 million workers in the UK find themselves unable to work because of illness or injury* and when you consider that state welfare benefits are only likely to be in the region of £70 to £100 a week (if you are even eligible), then you can see that it is important to consider how you would cope should disaster strike.
Should the worst happen, critical illness cover provides a tax-free ‘lump sum’. This is a one off payment that can help pay your bills, debts or even pay for alterations to your home such as wheelchair access should your condition require this.
Critical illness insurance will pay out if you get one of the specific medical conditions or injuries included in the policy. Be aware that not all conditions are covered and the policy will also state how serious the condition must be.
Examples of critical illnesses that may be covered include: heart attacks, strokes, certain types and stages of cancer, some conditions such as multiple sclerosis. Most policies will also consider permanent disabilities as a result of injury or illness.
The policy will pay out only once and some will make a smaller payment for less severe conditions.
It is unlikely to cover you for any health problems that you knew you had before you took out the insurance and this cover does not pay out if you die.
How much does it cost?
Your monthly payments will depend on a number of factors. These include your age, whether you are a smoker, your current health, your weight and your family medical history, your occupation as some jobs carry a higher risk than others and finally, the amount of cover you require.
As with most things in life, you get what you pay for, so better policies will charge a higher premium than poor quality ones with a large number of exclusions. Do check the small print carefully and read through what conditions are covered. An independent financial adviser can guide you through the policy details and find a level of cover that is right for your needs.
For more information contact Becky Hammonds on 07969 269677 or email becky@willowfs.co.uk.
*Figures from ABI
Source: ABI and Scottish Widows
