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Six types of basic protection every family should consider
We all want to safeguard our loved ones from harm, both inside and outside the home. From critical care to cover for calamitous accidents, here are six essential ways to ensure your family is well protected.
Founder of the Young Money Blog and author of Spare Change. Iona is also a freelance journalist and public speaker.Meet all the mentors
Looking after your loves ones might come naturally to you but some of the terms related to being able to do so might not. That’s why we’ve provided some handy explainers below.
An insurance policy that allows you to use funds in your pension pot to receive a guaranteed annual income for life. They’re arranged with annuity providers (typically insurance companies).
- Critical illness cover
Critical illness cover is a form of insurance that pays out a lump sum if you’re diagnosed with a specified critical illness during the term of the policy.
- Life insurance
Pays out a lump sum to dependents if the worst happens and the policy holder dies during the contract.
- Level term life insurance
As the name suggests, level term cover provides a fixed rate of protection over the term of the policy. If you select £100,000 of protection over 25 years at the start of the policy, you would be covered for this amount until the policy ends.
- Decreasing term life insurance
Decreasing term life insurance is specifically designed to cover the repayment of a mortgage. Over time the amount of cover required reduces in line with the amount owed on a mortgage.
- Long-term care
Services which help people with an illness or disability who cannot care for themselves. It can be provided by the government or funded privately.
- Income protection
A type of insurance that pays out a percentage of your salary for a set amount of time if you are unable to work because of sickness or injury.
- Death in service
A lump sum paid to a family or dependent by an employer in the event of an employee's death.
Drawdown is when you choose to access funds in your pension. Up to 25% can be taken as a tax-free lump sum, and you can invest the rest of your pension in a range of investments, drawing down further funds as and when required.
A legal document that sets out your wishes for when you die, including what happens to your property and prized possession.
Everyone needs help from time to time and so you may find these links handy.
Money Advice Service
Learn how to make and change a will and find out about the different options available.
Debt and consumer advice service, covering everything from managing debt to negotiating with creditors.
Financial Conduct Authority (FCA)
Information about financial scams and what to do if it happens to you or a member of your family.
Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.