As a parent, providing for your children is a top priority – from making sure they have food on the table, to ensuring they have the extras they need in life.

Putting income protection in place means you’ll always be able to support your children with a regular income if the unthinkable should happen and you’re unable to work because of serious illness or injury.

Keeping your family financially healthy.

2024 research from LV shows that the average UK worker’s income supports three people, yet 65% of the working population have experienced a life event where protection might have provided support¹

As a parent, your children depend on you financially. But should you become ill or injured and unable to work, would your family be able to manage without your income?

Would your family be able to cover all the essential monthly outgoings – not to mention the extras you’re used to having?

In a two-parent family, even with a safety-net of sick pay and savings, you might struggle to keep up with your regular outgoings on one income, especially if you’re not well enough to go back to work for a substantial amount of time.

Financial struggle for your family is the last thing you need when you’re trying to recover from a medical condition.

Are you a one-income family?

It’s also worth bearing in mind that becoming a parent may mean you now only have one income if one parent is staying at home for childcare purposes. Protecting this main source of income is essential, as is the case with one-parent families. With the rising cost of childcare and bills, the need to protect your family against financial difficulty is more important than ever.

Income protection can give you the support you need, when you need it most.

By protecting your family this way, you can get help with mortgage payments, bills and food, as well as clothes, transport and leisure – protecting not just your essential outgoings, but your family’s lifestyle too. Putting income protection in place alleviates the risk of financial instability by providing your family with a regular source of income, so you have the peace of mind that your children will be provided for until you get better.

Income protection can be discussed with your adviser – so you can make sure you have the right protection in place to protect you and your family’s financial future.

Call us on 020 7317 7311 or email info@chapelgateprivatefinance.com.

However, a barrier stopping some from taking out financial protection is the view that insurance companies do not pay out or that they will find any excuse not to honour the claim. But is this actually true?

In reality, this is an unfortunate case of fake news and a worrying myth that is preventing some borrowers from having these important financial safeguards in place.

Do insurance companies pay out on protection?

The latest annual figures from the Association of British Insurers (ABI), show the protection industry paid out 98.3% of new claims in 2023, totalling more than £7.3 billion. This is a 14% increase in the total value of claims paid compared to 2022.

Furthermore, individual policies such as life insurance, critical illness and income protection saw a 14% increase in the total value of claims.

How do different protection insurances compare?

• 5% of critical illness claims were paid, with the value of claims averaging at £68,354
• 7% of life insurance claims were paid, with an average claim value of £80,403
• 32% of income protection claims were paid, with an average claim value of £22,270pa

So, with insurance companies paying out more than £20 million per day in 2023, we can definitely say that the myth of insurers not paying out or honouring claims is fake news.

Why would an insurer not pay a claim?

Given the strength of the data, it is hard to know why such a misconception exists. This is especially true as the data from the ABI continues to trend upwards each year.

Of course, there are cases where an insurer is unable to pay out on a claim. As part of its research, the ABI revealed that the main reasons for not honouring a claim is policyholders not accurately disclosing their medical history or habits when they took out the policy, or the claims not meeting the policy definitions.

How can we overcome this? It’s really important to be open and honest with your mortgage adviser when discussing financial protection. Whether it’s answering lifestyle questions honestly or disclosing pre-existing conditions or health concerns, this allows your adviser to pair you with the right product and provider. It also means the provider can fairly assess your application on accurate information.

Is it too late?

If you have thought that the myth of insurers not paying out was true, the good news is that it is never too late to put some protection in place. A financial adviser is best placed to run through all the options available and provide choices that suit your individual needs and your budget.

Best of all, your adviser will review with you regularly to make sure those products are still suitable and continuing to meet your needs. This is particularly useful if your situation changes during the life of the policy – such as a new job, your family grows or your health changes. Plus, they can help you make the most of any inclusive services (such as counselling, remote GP services or physiotherapy sessions) or even help make a claim if needed.

While we all may expect to pay our mortgage every month, the truth is that life is unpredictable. Whether it’s our health or something else, all could throw a spanner in the works and leave us in a difficult financial position. In those challenging moments, protection insurance can offer a solution and real peace of mind. If you’re renting, buying or remortgaging it’s never been so important to have that conversation and put that financial safety net in place for you and your family.

Talk to us to explore your protection options and we can tailor a plan that meets your specific needs and circumstances.

Call 020 7317 7311 or email info@chapelgateprivatefinance.com

With the rise in the cost of living and borrowing, many people are worried about paying the bills if anything happens that leaves them unable to work. Recent surveys have shown that the average UK family doesn’t have enough in savings to be financially secure for long if they’re no longer receiving an income.

What is critical illness insurance?

Critical illness insurance pays a one-off, lump sum if you’re diagnosed with a condition or disability that is covered by your policy. It covers a set number of years and can be offered as extra coverage when you apply for life insurance. You can choose whether you want the payout to rise over the course of the term (so it keeps up with inflation) or the opposite – decreasing because you aim to cover something specific like your mortgage.

How does critical illness cover work?

Certain illnesses are covered as standard by most insurers, including, some types of cancer, heart attack, stroke, organ failure, multiple sclerosis, loss of arms or legs and Alzheimer’s and Parkinson’s disease. Some providers may allow you to add additional illnesses to your policy, which you’ll pay more for. Your children could also be covered as part of your policy so ask your adviser about these options if it’s something you’re keen to have in place.

Although a critical illness diagnosis can mark the start of a claim in some policies, others may only begin to offer protection once your illness hits a certain level of severity. It’s important to work with a financial adviser when reviewing a policy and all the small print before you commit to make sure you are aware of areas not included.

An adviser can help you figure out the best approach to your life insurance plan and any other coverage you need for you and your loved ones.

What is life insurance?

Life insurance pays an agreed lump sum to your loved ones (or any other beneficiaries) when you die. The terms of the amount paid out are set when you buy your policy. Life insurance is there to help ensure your family has financial security during a difficult time without you and to give you the peace of mind that they will be able to continue to pay the mortgage for example.

1. Term assurance

Runs for a set number of years and a payout is made if you die during the term. Once the term comes to an end, coverage also ends, so if you die after the end of the term, there is no payout.

2. Whole life insurance

Carries on for as long as you are alive and will pay a lump sum when you die. Whole life will cost more in premiums than term life, and you will keep paying the premiums on your policy throughout your life, to stay covered.

3. Employee life insurance

Check with your employer to see if you are covered by employee or group life insurance (also known as a death-in-service benefit) as part of your contract. This coverage usually pays between two and four times your annual salary.

“Life insurance pays an agreed lump sum to your loved ones (or any other beneficiaries) when you die.”

Get in touch

We can help you understand how critical illness cover and life insurance helps to provide financial security for you and your family. Please get in touch to arrange a time to chat, telephone 020 7317 7311 or email, info@chapelgateprivatefinance.com