Protecting More than Your Mortgage
Sometimes simple things only become obvious when we look closely.
87% of people would prefer protection over and above that which simply pays off their mortgage according to new research conducted by Bright Grey in May earlier this summer.
When the main wage earner dies mortgage protection will remove the burden of the mortgage debt but it will not deal with the rest of the financial headaches a family will still need to face on an ongoing basis.
However the research findings reveal that only 33% of parents actually have life insurance over and above the mortgage.
So here’s something you can do which is a little different yet can really bring a whole lot of peace of mind.
By paying just a little extra each month you can take out a Family Income Benefit policy which help ensure that you don’t have financial worries on top of all the other stress that a sudden loss will inevitably bring.
Here’s how this simple but very effective little product works…
Family Income Benefit pays out a monthly income on the death of the insured until the end of the policy term chosen at outset. If a client (male) insured themselves for £20,000 a year over 20 years then he would have £400,000 of cover from day one. If he died one year into the policy he would have £380,000 worth of cover. The good news is that for a little extra you can protect yourself against inflation and index link your cover too.
*An Example
- The mortgage debt is £120,000
- Monthly repayments cost approx £810 each month
- Net income is £2440 each month
- Life cover for the mortgage pays out, saving the family £810 each month
- The monthly income shortfall amounts to £1630.
Most families would find it very difficult to make up a shortfall of this size every month.
Whilst the family might not need all of the £1630 it is likely that they will need some form of regular income.
Adding Family Income Benefit of £1250 each month would only cost the client an extra £8.13 a month on top of their £120,000 lump sum life cover. Whilst it is not a huge amount of money, it could be the difference between having to perhaps sell the family home or not.
It’s a very simple product, yet very effective – and that’s it’s beauty.
If you’re one of the 87% who need more than just getting your Mortgage paid but you could foresee a need for a regular hands free income too, then Family Income Benefit could be a good fit for you. Give it some thought now - when you don’t have to, so you or loved ones can rest easy should the need ever arise (God forbid) in the future.
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