In today’s Blog we are going to be discussing life cover, one of the most important elements of any financial plan.
One of the most common enquiries we have at Howard Wright is new clients asking for life cover and asking the question “How much life cover do I need to protect me and my family”

How Much life cover do I need?

You wouldn’t be human if you didn’t run your eye down your bank statement, see the name of an insurance company, and think, ‘Is that what I’m paying for life cover, or do I really need to spend that amount? After all, I’m feeling fine…’ Unfortunately, being a financial adviser has its highs and lows there’s no better feeling than creating a financial plan for our clients and taking the stress out of their retirement planning its an incredibly rewarding job, unfortunately, at the same time when looking after clients, things don’t always go to plan or as expected in life.

An example as to why you need life cover

I’m going to tell a story about a client who sadly passed away. The Client was feeling fine in great health he had a successful business that he was going to sell in a few years’ time. By then his children would have left home: and He and his wife were going to buy a mobile home and travel around Europe. “Exactly what I should have done thirty years ago,” he said. One Friday night he went to the pub, It had been a stressful week some suppliers hadn’t delivered on a big contract and he needed a drink, he needed to unwind. Unfortunately, he had a heart attack and tragically died on the way to the hospital.

He was only in his mid-fifties, but as anyone who follows football will know, heart problems can strike the fittest people at any age. And we all know someone who’s had cancer or someone who’s been in a car accident. Yes, it can be tempting to think you don’t need your protection policies “It won’t happen to me” – but dying without life cover in place can have a devastating effect on those you leave behind. If the client hadn’t of purchased life cover his loved ones would have been in an incredibly difficult financial situation, whilst grieving for the loss of their husband and father, without the ability to pay the basic household bills and run his business that was once thriving.

What was the outcome for the client’s family because the client purchased life cover?

Because he had the foresight to purchase and discuss his protection needs for himself and his family, he was able to protect his family in the event of the worst-case scenario. Because he was a self-employed business owner, Life Cover and income protection had been recommended.

This meant that if he fell ill for over 4 weeks an income would start to be paid by the insurance company to him and his family, he also purchased life cover and as he sadly passed away a cash lump sum was paid into trust within a matter of weeks for the benefit of his family to live off for the rest of their lives. This was an incredibly important element of the advice given as he was self-employed and the sole breadwinner for his family.

Ask yourself the following question.

“If you were to pass away or be critically ill and not able to return to work for a long period of time would your spouse, be able to pay all the household bills on their own with the loss of your income to the household?”

How is protection recommend at Howard Wright?

In the old days, it was simple: your insurance agent would visit and tell you that between ten and twenty times your salary was the ideal figure for life cover. Today, it’s slightly more complicated, especially as many of us have death-in-service benefits and / or partners that work and far more people are self-employed than they used to be. At Howard Wright we tailor the cover to your actual needs rather than just a multiple of your income.

Firstly everyone needs to make sure that their mortgage and any other debt is covered; Secondly, you need to ensure any other commitments, such as children’s educational needs – school or university – are provided for. Thirdly you need to have enough cover to fund for the loss of income to the household and in some cases all the income as some spouses decide they no longer want to work in the event of a loved ones death.

Finally, and this is missed by many, you need to make sure there is sufficient cover to not only fund all of the above but also to fund for the longer term goals such as retirement. It would be terrible to have the cover in place to fund for the loss of income during the working years only for the lump sum or income payments to stop when you reach retirement age with no other provision in place.

This is where a relationship with a good financial adviser comes into its own. Working these sums out for yourself can be a painstaking, complicated and depressing business.

Your Adviser at Howard Wright will not only be able to do the calculations for you, he or she will also be able to find you the most cost-effective cover. In addition, they will advise you on other specialist considerations. For example, does your life cover need writing in trust for your dependants?

How much on average does life insurance Costs?

You will be pleasantly surprised: life cover is not as expensive as many people think and it’s often the case that clients are paying more than they need to. Rates have fallen over the past few years and many existing policies could now be replaced with more economical ones. That’s why it’s so important to constantly review your financial situation on a regular basis to ensure you are getting the best value for your money a key element to the ongoing service we provide to our clients here at Howard Wright.

What factors will affect how much my premium is?

Factors such as your weight, occupation, amount of miles you drive per annum for work and your current state of health and if you have had any previous illnesses will all affect how much your protection needs will cost.
Sadly none of us know what’s around the corner: but speaking to an one of our advisers can at least guarantee that if the worst happens your dependents will be financially secure.

How can I get in touch for a free overview of my financial position and objectives which includes the protection needs of me and my family?

How can I get in touch for a free overview of my financial position and objectives which includes the protection needs of me and my family?

As always, we’ll be happy to discuss all aspects of your life cover with you, answer your questions and provide you with quotes and comparisons to ensure you get the best price possible for your protection.

To discuss your protection options completely free of charge, please contact Ashley Smith one of our Chartered Financial Planners at Howard Wright, you can call him on 0345 688 4939 or you can fill in our enquiry form below, it only takes 20 seconds to complete. We look forward to hearing from you and seeing how Ashley can help.


This article contains information from sources believed to be reliable but no guarantee, warranty, or representation, express or implied, is given as to its accuracy or completeness. Howard Wright Ltd does not undertake any obligation to update or revise any future statements. Past performance is not a reliable indicator of future results. Investments can go down as well as up and actual results could differ materially from those anticipated. This article is for information purposes only and has no regard to the specific investment objectives, financial situation or particular needs of any person as such, the information contained in this article is not intended to constitute, and should not be construed as, investment or financial advice. Appropriate personalised advice should be taken before entering into any transactions. No responsibility can be accepted for any loss arising from action taken or refrained from based on this publication. Howard Wright Ltd is Authorised and regulated by the Financial Conduct Authority.

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