A good financial plan prepares your clients and their family for unexpected life events. That’s why it may be a good idea to have an emergency fund, for example, so they can absorb surprise costs.

When it comes to prudent planning, protection is a more important way for them to prepare for life-changing events. The right cover may support their family financially in the event of illness, injury or, in the worst case, their death.

Unfortunately, new research reported by Mortgage Strategy has found that only 44% of people have enough life cover to protect their family.

This could leave your clients and their families in a difficult position if the worst happens. Luckily, once they understand their protection needs, they can make sure they have adequate cover.

Read on to learn what kinds of cover your clients could be missing out on, and why it is important.

Younger clients are most likely to be missing vital cover

The research found that only 44% of people had adequate cover to protect their family, and this figure drops to 35% among those with a mortgage.

Worryingly, your younger clients are most likely to lack cover. The research reveals that just 30% of people aged 30 to 34, and 34% of people aged 35 to 39, have adequate cover.

This is concerning because those aged 30 to 40 – a group known as the “squeezed middle” – are more likely to have children and a large mortgage.

Indeed, 26% of couples with children don’t have enough cover to support their families. 

One reason for this protection gap could be because people consider the cost of paying off their mortgage, but not the cost of raising their children when calculating the level of cover they need.

Lack of adequate life cover could leave your clients’ families in trouble

Protection policies are a crucial part of your client’s overall financial plan. If they don’t have adequate cover when they die, it could affect their family in several ways:

• Leaving them unable to pay the mortgage – when your client passes away, their surviving partner may have to pay the mortgage on their own without the additional income.

• Leaving behind large debts that come out of the client’s estate – if your client has large debts when they die, they will be paid from their estate, meaning they cannot pass on as much of their wealth to their family as they would have liked.

• Leaving large funeral expenses – according to Sun Life, the average “cost of dying” in 2022 was £9,200. This is a significant financial burden to leave behind without life insurance to help cover the cost.

• Disrupting their retirement plans – if your client’s family have to shoulder the financial burden caused by a lack of life cover, this could make it more difficult for them to save for retirement or for other life goals.

As you can see, if your client does not have adequate cover to protect their family, they could leave their loved ones in a very difficult position. The good news is, with the right protection in place, they can ensure that their family are secure after they are gone.

The right cover could protect your clients from serious illness or injury

While life cover protects your client’s family in the event of their death, they may also want to consider additional cover to prepare themselves for uncertainty while they are alive.

For example, if they fall ill and they are unable to work, income protection or critical illness cover can be incredibly valuable. This protection can ensure your client receives a lump sum payment or regular income to support them until they are well enough to work again. In the case of serious illness, it may also help with vital care costs.

Your client can then afford their outgoings while they focus on their recovery. And, perhaps more importantly, it allows them to continue working towards their medium- and long-term financial goals. 

Consequently they do not have to make sacrifices to their financial plan and they can still achieve the retirement lifestyle they want.

Get in touch

The right protection can guard your client’s wealth against uncertainty and ensure that they meet their financial goals, even when the unexpected happens.

Please contact us on hello@ardentuk.com or call 01904 655 330. As an award-winning financial advice company that was a 2022 VouchedFor Top Rated firm, you can be sure that we’re a bona fide company providing excellent advice and high-quality service.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Note that protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary by product provider and will be explained within the policy documentation.