Choose to be protected

While the UK does have systems in place for protecting those in need, those systems are not necessarily as effective as some people might wish.  Those in paid employment may have an enhanced level of protection via employee benefits, but might still benefit from taking out enhanced cover.  The self-employed either have to rely on the state or make their own arrangements.  With this in mind, here are five points you may wish to consider.

Private medical and/or dental insurance can enhance the care you receive When you have private medical and/or dental insurance, you may well find yourself being treated at an NHS hospital by staff who work for the NHS, however you may also find that you have a vastly greater degree of control over when and where you are treated which may be extremely useful if you simply wish to be treated as quickly as possible so you can get back to work and keep earning an income.

Income protection insurance can help you to pay your bills even when you cannot work The key difference between income protection insurance and payment protection insurance is that income protection insurance is essentially a replacement income and as such is yours to spend as you wish, whereas payment protection insurance is typically to ensure the repayment of specific debts, such as mortgages or other loans and can only be used for that purpose.

Critical illness cover can be valuable even for those with no income Critical illness cover, as its name suggests, pays out if you are diagnosed with one (or more) or a range of critical illnesses.  Like income protection insurance, the money can be spent as you wish.  Unlike income protection insurance, however, critical illness cover can be a worthwhile purchase even for people who don’t have an income of their own, such as home makers.  The reason for this is that many people undertake activities which do have a financial value, even if they do not receive payment for them, or, to put it another way, if a home maker became too ill to act as a home maker then someone else would have to do what they do and unless you are extremely confident that your personal support network, such as family and friends, could provide all the help you need for as long as you need it, then you will need to employ someone else to undertake the tasks normally performed by the home maker and that person will, presumably, need to be paid.

Life insurance can pay out before death as well as after If you are unfortunate enough to be diagnosed with a terminal illness, then you may be able to make a claim on your life insurance policy while you are still alive.  In any case, if you have dependents then having appropriate life cover in place may help to give them choices after your death, such as the choice as to whether or not to stay in the family home rather than to be forced to sell it to cover an inheritance tax bill.

A cash cushion can help to cover shorter-term needs Hopefully, you will get through life without ever having to call on any of the insurance policies mentioned above, in fact, hopefully you will get through life without experiencing any serious upsets.  It is, however, probably too much to hope that you will get through life without any short-term emergencies of some sort, which is when having some cash savings can come in very useful.  These cash deposits may not generate great returns, so it’s important to strike the right balance between having funds readily available and growing your money through investment.  Professional advice may help with this.