A Lifetime of Protection

As you move through life, your needs and wants often change as does the type of insurance cover you require and the level of cover. While insurance may be an unglamorous topic, having the right cover in place can make all the difference in a difficult situation. Here we take a look at what types of personal cover you may need at different stages of your life.

Young adult student, without children Although students are adults in the eyes of the law, they are in a very specific financial situation in that they often have little to no personal income and therefore any form of insurance which relates to income protection is probably a waste of money. Medical and dental insurance, however, could well be worthwhile and if the student has any plans to travel and/or work abroad then the appropriate insurance should be regarded as a must, even if they have an EHIC card.

Young adult workers, without children Once a young person is earning an income and supporting themselves, at least for the most part, then it becomes appropriate to look at some form of income protection. At a basic level, a younger adult could look to self-insure, at least in part. Young adults with budgeting skills will know how much money they need to meet their commitments each month and the more cash savings they have the longer they will be able to meet those commitments if they are out of work (or ill). Having said that, some element of insurance may be helpful. If they have pets, pet insurance will help ease the pain of expensive vets bills, which can hurt even when you’re working. PPI could be a useful way to ensure you meet credit commitments if you are experiencing financial turbulence. Young adults who are self employed should definitely look at critical illness cover and income protection insurance, even those in standard, paid, employment may wish to see if they would benefit from some extra cover in this area. For people without financial dependents (and with savings to cover their funeral) life insurance is only likely to be relevant if they have a mortgage.

Adults with children Pretty much everyone agrees that children change your life in all kinds of ways and that includes your financial life. Once you have children, you have people who are going to be financially dependent on you for at least 16 years and quite possibly for a lot longer. That means life insurance ceases to be something you need to keep your mortgage provider happy and becomes something which is vital to ensuring that your children will be in a good position to cope financially in the event of your death. When both parents are involved in raising children, then both usually need to be insured even if only one parent earns an income, because the death of the home maker would mean that someone else would have to step in to replace the contribution they currently make to the running of the house. The level of cover has to reflect the fact that children, by definition, are at the start of their lives and will therefore have financial needs long into the future.

Empty nesters In some ways, empty nesters are in a similar position to young adults without children, but these days it is far from unusual for parents still to be offering some level of support to adult children, particularly if the children have their own children. It is also possible for people to be grandparents when their own parents are still alive. Because of this, it may be best for people in this stage of life to take a very detailed look at their situation, possibly with help from a professional, to see what sort of insurance they require at this point and what level of cover.