“Fun is like life insurance; the older you get, the more it costs” is a popular quote you might find when looking for life insurance cover on the internet. This is one of Kin Hubbard’s quotes, a famous cartoonist and journalist, and we couldn’t agree more with him. Life insurance cover does get more expensive as we grow older, so there is no reason to neglect to buy it.

Life insurance coverage should be part of your broader financial planning process as it could help you achieve your future goals in every stage of life. In our blog, you can read the 5 different life stages that bring about the need for taking out life insurance policies.

Should I have life insurance?

The answer is straightforward and does not need much thinking; yes. Taking out a life insurance policy is key to making sure that your loved ones are covered when something unfortunate happens to you. So, a life insurance plan ensures that the people you leave behind won’t experience any unexpected change in their lives.

Giving financial protection to your loved ones is a selfless act that many people neglect to plan. Ignoring this need could lead to your partner or your children having to deal with your financial obligations when you are no longer there to support them. Taking care of your financial commitments could become a significant burden, especially if you had been the family’s breadwinner.

Life insurance for different life stages

We have split an adult’s life into different stages to help you understand the value of having life insurance cover as you grow up. Sex does not play a role as both women and men should be insured to mitigate risks we pass from one stage in life to another. Life insurance products are numerous, and you can choose the best for your needs. However, since you might not know the right type of life insurance, we would recommend seeking advice from experienced and fully qualified advisers such as the ones you can contact when working with Holborn.

Insurance cover for young adults

The question that comes up is, “why should a young man or woman have life insurance?”. The truth is that when we are young we don’t think that anything wrong would happen to us, and the feeling of being invincible is strong.

Despite a young adult’s mindset, dangers are real even at that age. The way of life has changed in the last few years, and health problems increasingly affect the lives of younger people. Adding to that, young adults are prone to risky actions which could lead to hazardous situations.

You may want to consider life insurance even if no one else financially relies on you. If someone else financially relies on you, even in your 20s, you should think about it. When it comes to life insurance, because your premiums likely remain steady throughout the duration of your policy, it may be more prudent to purchase life insurance when you are younger rather than risk delaying the decision. This is because any future illnesses will increase the insurance cost or may prevent you from being eligible for coverage altogether.

Life insurance for married couples

Life cover becomes more critical when you tie the knot with your partner. You are no longer alone in life. Your life as a married couple means more obligations, financial or not when you are pushing to achieve your life goals. Partners should consider having sufficient cover in case things turn for the worse.

This is the time period during which a life insurance policy becomes necessary. If something unexpected were to happen, you would want to make certain that you didn’t jeopardise your partner’s wellbeing. While you can choose the amount of coverage that best suits your needs and financial situation, make sure that it is sufficient to pay off any debts or an outstanding loan that may be due as well as to provide a reliable source of income for your household.

Life insurance for married with children

Some say that you don’t really experience married life until children come into your life. Becoming a parent means that there are more family members that you should look after whilst the number of expenses increase exponentially. As the family budget gets stretched, financial security is of utmost importance. Any unfortunate event related to your health could cause significant problems for your family as family income could be slashed. Less money brings more uncertainty, especially if you have taken a loan to buy your home or any similar expensive purchase.

You may also want to review your life insurance to ensure that it is adequate for covering your children’s school fees, university education and providing overall more considerable income protection. Another important aspect to consider at this stage of life is retirement. It is now time to invest in some retirement plans in order to have an independent and stress-free retirement.

Insurance for the elderly

It is possible for older people who are approaching retirement or who have already retired to believe that they do not require insurance at this point in their lives. Most of your financial obligations, such as raising your children, covering mortgage payments or paying for your children’s university education, may be behind you.

Suppose you have no debt, enough savings for you and your partner to live comfortably for many years into the future, and money set aside to cover funeral expenses and other unexpected expenses. In that case, you may not need life insurance in your 60s or 70s. So, why do senior citizens require life insurance coverage? For many older persons, life insurance can serve as a critical safety net when their families are most in need of assistance.

Holborn Assets advice on life insurance

Life insurance is essential because it can help preserve a family’s lifestyle and cover its needs in the case of an unexpected event. A life insurance policy mitigates the financial consequences while serving as a long-term financial planning tool.

If you believe you lack the necessary knowledge to determine which solution is best for you, our qualified and experienced independent financial advisers at Holborn are here to assist you. Contact us today to secure the future of your loved ones.

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How many switched provider in 2018?

• Car insurance: 28%
• Home insurance: 23%
• Energy: 20%
• Mobile phone: 17%
• Broadband: 14%
• Credit card: 11%
• Current account: 10%
• Land line: 9%
• ISA or savings account: 8%
• Mortgage: 6%

Top tips for switching

• Put key expiry dates in your diary. Otherwise you won’t remember when the time comes around to look at switching, and you may miss out on a securing a better deal.
• Don’t accept an automatic renewal without checking out the market first!
• Read the small print.
• If a deal features an introductory rate, make sure you know what rate comes afterwards. Ensure you have a clear picture of your overall liability.

So get switching!

The post Time to switch insurance? appeared first on Holborn Assets Cyprus.

Critical illness insurance gives you financial options when you need them most. And stats show that the policies DO pay out.

Although there’s sometimes stories about insurance companies being picky when it comes to pay outs, the fact is that 92% of critical illness policies did pay out in the UK in 2016 with an average award of £68k – according to the prestigious Association of British Insurers.

In the Middle East, the story is the same: insurance giant Zurich International Life paid out 91% of critical illness claims between 2014 and 2016.

Critical illness strikes earlier than you think.

Researchers from Zurich found that the average age of a claimant in the Middle East region for a critical illness pay out was 48 years old. That’s very young.

And, what’s more, it was found that the vast majority (93%) of claimants for cancer pay outs were aged under 60 years old – as were sufferers with heart problems (87%).

How does Critical Illness Insurance work?

Critical illness policies give you a one-off lump sum in the event of you presenting with one of a list of 30-60 specified medical conditions. Here, for example, is insurance company Aviva’s list

Between 2014 and 2016, Zurich reports that, “over two-thirds (68 percent) of claims for men were paid out due to cardio vascular disease while four out of five (81 percent) claims paid out to women were for breast and cervical cancer.”

Critical Illness vs. Medical Insurance

Medical insurance is compulsory in the UAE, and many packages are likely to cover you for some costs should you acquire a critical medical condition. In the UAE, for example, the treatment of breast cancer is now provided free (courtesy of the government) as part of standard medical insurance.

So medical insurance helps in a variety of critical health situations. But, by giving you a lump sum to spend as you wish, a critical illness policy will give you the financial flexibility you need to deal with your whole – radically-changed – life situation. Medical insurance deals with some bills; critical illness cover manages the impact on your whole life.

Critical Illness vs. Life Insurance

Life Insurance gives you a lump sum to look after your family when you have passed on (however you have done so). Critical illness insurance gives you a lump sum whilst you are still alive but suffering from one of the pre-specified medical conditions.

Critical illness policies often come as part of life insurance policies.

Critical Illness vs. Income Protection

There’s sometimes confusion between critical illness and income protection policies.

How are the policies different? Critical illness cover gives you a one-off windfall in the event of getting one of a limited range of life-threatening conditions (serious illness or injury), whereas income protection gives you a steady financial trickle in the event of you having to take time off work for any sort of illness or injury (whether serious, life-threatening or simply a temporary inconvenience).

What distinguishes income protection in particular is that it is work-related. Policies centre on your ability to work, and pay out monthly usually 65% of your gross income. Critical illness cover, on the other hand, has nothing to do with employment and pays out as a lump sum if you present with a specified medical condition.

Both policies – and, indeed, most health-related insurance policies – overlap. Depending on the situation, both types of cover could apply, neither, or just one! All combinations are possible. For example, 23% of income protection pay outs made by reputable UK insurers Drewberry Insurance (2011) involved heart/cancer/stroke – which are key targets for critical illness cover.

What about pay outs? Income protection awards are likely to come your way more often than critical illness awards. And that’s because income protection covers a far broader spectrum of possibility; critical illness is tied to having a specific medical condition after all, whereas income protection centres on whether you can work or not.

Statisticians from Which? consumer group found that only about half of those having to be off work for 6 months or more would qualify for a critical illness award. That’s not surprising.

SIMILARITIES – critical illness & income protection

• Cover for injuries and illness
• Pay out is free to spend as you wish
• Guaranteed/fixed premiums available

DIFFERENCES – critical illness & income protection

• Income protection is tied to earnings; critical illness is not
• You can only claim once with critical illness cover; with income protection, you can make multiple claims
• Critical illness is tied to specific medical conditions; income protection is not

Critically confused?

So critical illness cover has nothing to do with dying? What? Well, that’s the truth of it. Usually critical illness policies demand that you outlive your definitive diagnosis by ten days or similar – but, other than that, whether you live or die does not influence the operation of a policy.

As moneysupermarket.com point out, there’s a whole other type of cover called Terminal Illness Cover.

Confusing, isn’t it?

Ask somebody who knows

Insurance can be confusing because policies overlap. Policies tend to have misleading names too. Policies also have a bewildering range of strengths and weaknesses – but this is a factor for you to use to your advantage. Get an expert in to make the best of what’s out there.

Generally IFAs are not tied to any one product or provider – but they may be able to get you a special deal. And they’ll certainly know what policies work together and which don’t.

Expert assistance generally works out saving you a lot of money – despite insurance policies being relatively cheap. It’s better to “invest in the best” guidance you can get, and build a system of insurance that makes sense.

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