Everyone is looking at their budget in these hard times. People are going through all their direct debits and standing orders and seeing what they can afford to cut to save some pennies. It is with some irony then that at these times of hardship one of the first things to go is Life Insurance.
As a qualified financial advisor, I quite often wonder how people prioritise various aspects of their financial situation. It is very amusing to see that people consider Cable and Sky TV to be an essential expense, and for some bizarre reason life insurance is not. It is for this reason and the fact that I have a lot of clients at least seeking advice before making cutbacks that I feel this article is worth writing.
I was once told a story about a man who went to work and unfortunately he crashed his car and died. Now obviously the car was written off and was a complete insurance claim. Some weeks later there were two insurance men walking up the drive one had a cheque for 20,000 which was the average amount people insured themselves for back then and the other had 25,000 which was the replacement value of the nice BMW the man drove.
The question the story teller asked me at the time was with these two cheques which do you think the dead mans widow could replace first? I think you will agree quite a poignant story. But the point to this story is as a nation we put a far greater value on our possessions than we put on ourselves and this is no more obvious than in the times of poor cash flow when people start cutting costs.
So if you are one of those people who is currently looking at your direct debits for the month and are thinking to yourself that it would be so much easier on you money wise if you weren’t paying out for your life insurance, have a think on this. You took out your life insurance policy back then for a reason, to provide adequate protection for your family in the event of your death, and that fact still remains. If the worst was to happen, as it sometimes can, your gym membership or Sky TV subscription is not going to look after your family in your absence.
Now please understand I do not want to sit here and write an article aimed at scaring people into keeping life insurance. Quite frankly it does not really matter to me. The reason I do it is simple, as an adviser I end up dealing with clients who have lost loved ones and in some cases there is life insurance, rarely adequate amounts but there is some, but in other cases there is none. All of the people I deal with who are in this situation say, without exception, I wish we spoke to you before this had happened and you would have made sure we had sorted this out.
I can only give advice to people face to face if they knock on my door, but hopefully by writing these articles I can reach a larger audience in order that the right choices be made when planning ahead.
What it all really boils down to here is that if you are considering your options and thinking that way may be saving by canceling a policy then seek advice before you make that step. By going to a financial adviser you will be benefiting from professional advice on what is an extremely important topic. Remember also that if you have had any health issues since opting for a life insurance policy, by canceling it now you may find it a lot harder to get another one in the future. As well as this, if you need to cut back money wise, a financial adviser will also be in the position to advise you on alternative policies that may be available. These may cost less than what you are presently paying and, whilst they might not give you the same level of cover as you have at present, they will assure you and your loved ones some degree of protection for the future. The bottom line is that there will be something in the future to fall back on.
