Guest Blog by CMME: Are You Protected If The Worst Happened?

As 2020 continues to raise a lot of uncertainty for many of us and with so much unsurety surrounding our incomes, our health and what the next year will look like – this year has forced us to confront our financial security.

 

In short, 2020 has illustrated the need for financial safety nets and supports provided by protection insurance. Previous years demonstrate this as well, the Association of British Insurers highlights that the insurance industry paid out more than £5.7billion in protection claims in 2019.

 

With claims paid out of this size, are you as well protected as you should be?

 

Now many of us are confronting what would happen to our homes, families and businesses if the worst happened, you may be asking yourself:

 

• What would happen if I were unable to work because of an extended period of illness?
• What would happen to my mortgage if I passed away unexpectedly?
• Are my family supported if something happened to me or my business?

 

What types of financial protection should you consider as a self-employed professional?

 

CMME knows that you work hard for your income and we’re here to help you financially plan for the unthinkable.

 

• With approximately 1,000 new cancer cases in the UK a day, over 85,000 people admitted with strokes every year and heart attacks on the rise, we can’t avoid the possibility that we will, at some point, be ill – but we can be prepared.

 

Here’s a non-exhaustive list together of the financial protections you might want to think about having in place if you don’t already:

 

• Income Protection Insurance: 

A big question you might ask yourself if you’re thinking about your finances is: How would I keep up with my mortgage payments, my bills, my childcare, if I couldn’t work suddenly?

Income protection, where suitable, is designed to protect you in the event that you can’t work. It replaces part of your income if you are unable to work for a long period of time because of illness or disability:

• You can insure up to 60% of your current income (salary and dividends)
• Your take-home payments will be tax-free, as the tax is paid on premiums
• A bespoke plan is built around your unique needs and budget

Some illnesses that Income Protection will cover* include:

• Back conditions
• Mental illnesses like depression and anxiety
• Heart condition
• Cancer

Take a look at CMME’s guide to Income Protection Insurance here.

*Depending on your policy

 

• Life Insurance:

If the worst happens, you want to make sure your family is looked after, and though it is a topic most of us would rather avoid – it’s an important conversation to have and avoiding it could mean that you are not prepared. 

 

Unlike those in permanent employment, you will not be covered by a workplace policy provided by your employer. It is up to you to have put in place all the necessary means to make sure that your family is protected.

Life insurance will ensure your family is taken care of in the unfortunate event of something happening to you.

 

• Critical Illness Insurance:

A critical illness can change your whole world, right from the diagnosis. The last thing you need to be worrying about when you’re going through something like that is where money is going to come from.

That’s why critical illness insurance pays out a lump sum if you’re diagnosed with a critical illness. 

You can use the pay-out for anything such as payments for medical treatment or to pay off your mortgage.

To find out more about Critical Illness Insurance, check out CMME’s breakdown of what it is and why you might need it.

CMME can give advice and support to self-employed people and offer bespoke advice on your individual situation. If you would like to know more, contact CMME today.