Tim and Julie's Story
Tim and Julie had just agreed a price for their first home, and asked us to advise on and arrange their mortgage. Tim is a self-employed photographer, and Julie is employed as a nurse. They have a two year old daughter, Chloe, and hope to have another baby in the next few years.
Like all first time buyers, money was extremely tight. They'd had to save hard for several years to build up a deposit, and they'd had to buy at the top of their budget, so the mortgage payment was going to be challenging. Like most 20-somethings, they'd got large student loans and of course they have child care costs. Quite understandably, they still wanted some sort of quality of living too. Living on baked beans for the next ten years was not an option!
We always ensure we talk to our clients about protection insurance. For many young people, protection seems like a low priority: dying or the risk of serious ill-health often seem a long way away. Tim and Julie did understand the need for protection, unfortunately through personal loss.
Tim's mum had recently died at the tragically young age of 53. She had been wise enough to take out life insurance some years earlier, and so Tim's dad had been able to repay the mortgage and stay in the home that had so many memories. He wouldn't have been able to afford the mortgage on his own and so would have had to move, at a time when he was least able to cope with doing so.
Julie already had life insurance through work and they had considered taking out cover for Tim. They had not considered critical illness cover or income protection though. They were amazed when we pointed out some real statistics: for a person aged 30 now, the risk of dying by 65 is approximately 4%, the risk of a serious illness by 65 is 13%, and the risk of being unable to work for 2 or more months is 38% (source: Royal London). Losing income was clearly a big concern for them.
Julie is fortunate enough to benefit from full pay for the first 6 months' of absence from work through illness or accident, but as a self-employed person, Tim's income would stop immediately if he was unable to work. The loss of his income, even for a short period, would be extremely difficult, and for a longer period it would be catastrophic. They would quickly not be able to make their mortgage payments and could risk losing their home.
We discussed a budget they would be comfortable with and tailored a protection package to their circumstances. This included life insurance for Tim and some critical illness cover and income protection for both of them. They were reassured to know they had cover and that it was affordable for them.
Nobody likes paying for insurance, especially when it is insurance that will only pay out if something fairly horrible happens. The bad news is that death or illness can happen to anyone at any age. The good news is you can insure yourself to ease the pain and worry for you and your family if you do die or are taken ill.
Maxwell Moore does not charge for any aspect of advising on protection insurance. Call us today on 0330 122 7887 to find out how we could help you. We'll give you the facts and the costs and hope the benefits sell themselves - there's no hard sell and no obligation. You've certainly nothing to lose by getting in touch.