Family Income Protection

When I very first started in financial services back in 1985 with the largest of the home
insurance firms in the UK
, I was shown a video called the Widows Story. It was a 30 minute film of the plight of a young wife and mother who had suddenly received the news, her husband had been killed in a motor accident. Whether I was naive or cynical (perhaps both) whilst I watched, I expected a John Wayne like figure to come along and help this lady who was left with 3 very young children and apparently no immediate family to assist her. Sadly the reality of this situation came to me and left an unforgettable print on my mind. I was given the tape to take home and watch.


At the time I had been married 2 years and we were blessed with a young son aged 18 months with another child expected in 6 months time. When I came home from my induction day, I told my wife how the day went and we watched this tape of The Widows Story together. As young parents we could relate to this tale and immediatly proposed a Family Income Benefit plan.

The benefits were clear to see for the both of us:

An Income paid till when our youngest child was no longer financially dependent in the event of either of us dying.

  • An Income paid free of Income Tax.
  • the option to receive a lump sum if needed.
  • A high level of cover for a relatively small premium.
  • The cover can be indexed linked, to avoid the plan losing value with inflation.
  • The plan offered us as parents the option to continue to work and pay for a child minder or give up work to look after our children should either one of us die.
  • The security and knowledge that our lifestyle could be maintained should either one of us die, before our children were no longer financially dependent. 

Thankfully we both managed to see our children through the school, college and university years but we knew that should one of us, had passed away during these important years of our childrens lives, our financial security was assured. 


Who should be insured?

You may be tempted to think that it is just the main bread winner that needs insuring.   THINK AGAIN!!!!!

***£32,032 a year – that’s the value of a mum!***

In a ‘Value of a Parent’ research 2011 it was highlighted that the average value of a Mum was over £32,000 a year. From the parents that participated in the research, only 54% had any life insurance. The research was carried out on behalf of Legal & General between 4 and 11 January 2011.

We found that the value of the work that Mums do around the home is £32,032, that’s 40% higher than Dads, who come in at £21,306.

The value of a Mum is sometimes overlooked when families try to work out their life insurance needs. The research also highlights that the average family spends £143 a week on the children, which equates to around £572 per month or £133,848 over 18 years.

If Mum was no longer alive where would that £133,848 needed to pay for domestic work and child-care come from? Who would fill the gap and help maintain the families living standards should the worst happen?

 

Examples of cost for a Family Income Protection plan:

  • Plan Benefits £20,000 per annum
  • Term of policy 18 years
  • Age 31 next birthday
  • Male or Female
  • Non smoker £9.73 per month
  • Smoker £13.39 per month  

As above except

  • Age 26 next birthday 
  • Non smoker £8.15 per month
  • Smoker £11.34 per month

Rates correct as at 25 July 2013

For more information or you wish to discuss further please contact:

Tel Number: 01708 640855

Email: Bestadvice@Lfmhavering.co.uk

Twitter: @LifestyleFinMan

Authorised and regulated by the Financial Conduct Authority