When it comes to looking after our families, women are largely the primary carers for children and elderly parents, yet we all too easily forget about ourselves. Life feels busy and our focus is on meeting the needs of those around us. Women often overlook their own financial wellbeing and don’t have the right protection and planning in place for unexpected events.
Looking at insurance first, there are three main types to be aware of: life insurance, critical illness cover, and income protection.
Life insurance protects you and your loved ones in the event of your death. This means that if you have dependents like children or a spouse who rely on your income to live their lives, or a debt to service like a mortgage, these will be paid and protected by the insurance policy if you die within the specified term. Depending on what suits your circumstances best you can choose to take out a policy that pays out one defined lump sum on your death or one that pays out a regular income over a defined period. The latter is often referred to as a family income benefit policy as it can provide an income for your dependents after you’ve gone.
Critical illness cover insures you against serious illnesses like heart attack, stroke and cancer and can be tailored to suit the amount and time frame of your choice. For example, if you take out a policy for £150,000 over 30 years you would be paid that amount as a lump sum if you suffered one of those illnesses in that timeframe.
Income protection does what it says on the tin. It is for occasions where you become incapacitated or seriously ill to the extent that you can’t do your job and therefore earn a salary. A key earner not being able to work for a number of years could plunge many families into financial difficulties. Income protection allows you to insulate your family against this by ensuring a regular annual income, potentially until retirement, in the event of your incapacity. Even those on company schemes, should review their policies to ensure they have sufficient protection.
When it comes to your retirement, the sooner you start saving for it, the better it is likely to be and the sooner it is likely to arrive. There always seem to be more urgent demands on our
time and money than thinking about taking care of ourselves in 20, 30 or even 40 years’ time. Working with a financial planner and using tools like cashflow modelling are the most effective ways to take control of your retirement planning and start taking care of your future self.
MITIGATING INHERITANCE TAX
Without proper preparation, Inheritance Tax (IHT) can cost your loved ones a significant proportion of the estate you leave when you die. But with expert advice and careful financial planning, it’s possible to mitigate the impact of IHT on your financial legacy. A financial adviser can help you devise a financial strategy and structure your estate to allow you to mitigate the impact of Inheritance Tax on what you pass on to the next generation.
Tracey Evans is an Associate Director at Progeny Wealth.
She is one of the most qualified individuals in the financial planning profession, as a Chartered Financial Planner, Certified Financial PlannerTM, Chartered MCSI, Registered Life Planner® and Chartered Wealth Manager.
Connect with Tracey on LinkedIn, call +44 7825 070 660 for an initial chat, or email firstname.lastname@example.org.
Progeny Wealth Limited is authorised and regulated by the Financial Conduct Authority.