Why protection matters

You might think you are too young to consider protection insurance, or that it’s not yet relevant or worth the cost in your current circumstances. However, even if you’re not married or don’t yet have children, there are still important protection policies to keep in mind.

One key advantage of starting early is cost: the younger you are, the more likely you’ll benefit from lower premiums, since insurers typically view you as a lower health risk. Preparing for the unexpected may feel like just another piece of admin, but it’s an essential step in safeguarding both yourself and your loved ones.

Here are some of the most common protection policies and how they work.

Life Cover (including Term Assurance and Whole of Life)

This can provide a tax-free lump sum to whoever you select by way of a Trust. This type of insurance is a way to protect your loved ones after your death.

Critical Illness

This provides a tax-free lump sum in case you are diagnosed with a specified illness such as cancer or suffer a heart attack.

At the same time, you could be balancing mortgages, children’s education costs, and other substantial responsibilities.

Income Protection

This gives you a proportion of your income if you had to take time off work due to an accident or serious illness. It offers valuable reassurance and stability during difficult times, helping you and your family manage financially when life doesn’t go to plan.

Further information

You can also read our previous article which outlines some of the most common myths around insurance: https://www.hjpcfp.com/article/detail/2024/december/six-myths-about-insurance.html

You can also read more about each type of insurance here: https://www.hjpcfp.com/article/detail/2024/december/what-are-the-different-protection-policies-available-to-me.html

The levels and bases of taxation and reliefs from taxation can change at any time. Tax relief is dependent on individual circumstances.

Trusts are not regulated by the Financial Conduct Authority.

Protection plans do not acquire a cash value. The cover provided will cease if premiums are stopped.

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Although the content of the article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.