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Why protection is the icing on the cake – Bright Grey

by: Ian Smart
  • 30/07/2013
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Why protection is the icing on the cake – Bright Grey
The wedding venue’s booked, the invitations have been sent out and the stag weekend is a distant memory.

Now all that’s left to do is to contact a financial adviser and discuss taking out some protection insurance. If only! For couples setting out on their life together, they probably won’t have given a second thought to how they would cope financially if one of them were to die or suffer a serious illness.

These days many couples about to tie the knot will already have accumulated a certain amount of debt with a mortgage and credit card bills.

It therefore makes even more sense to have a financial safeguard in place. Without it, a serious illness or condition that may require prolonged time off work, could severely impact on a couple’s finances as well as their lifestyle.

Getting married is generally a time when finances might be reviewed and that review should include looking at protection needs. Discussing the various types of products available with an adviser will help a couple understand what’s available and what product will suit their needs best.

Take joint life plans. Without advice some couples may opt for a joint life policy believing this is the best option from the point of view of price and the protection it provides. Joint life policies seem perfectly logical for covering mortgages because a loan only has to be paid off once but in order to provide complete protection a joint life policy might not be enough.

Taking out two single life policies may be slightly more expensive, but the advantages mean they are much better value for money. With joint life first death, if one person dies, the second person is left with no life cover. If the first death happens some time after the policy has been taken out, the survivor will be older and therefore more expensive to insure.

Choosing the single life policies approach also provides a couple with more flexibility. If they should unfortunately split up, they would each have their own cover. Joint life first death policies can’t always be separated which would mean cancelling the joint policy and taking out two single life plans.

Newlyweds won’t start married life thinking about death and illness but there’s no harm in being made aware of all the consequences should life take an unexpected turn.

Ian Smart is head of product development and technical support at Bright Grey

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