In the ever-changing landscape of our clients' lives, adapting financial protection to match new circumstances is key.
Recently, we had the privilege of assisting a couple who had transitioned from homeowners to renters and back to homeowners again, with significant changes in their personal and financial lives along the way.
BUDGET PER MONTH AVAILABLE
GROSS SALARY COVERED
ADDITIONAL CRITICAL ILLNESS COVER
Background
Several years ago, this couple made the decision to sell their home and move into a rental property. At the time, they had in place a reducing life cover linked to their old mortgage and income protection plans designed to cover their previous mortgage payments. Fast forward to the present, not only have their living situations changed, but both have also advanced in their careers, stepping into roles with higher incomes and moving from manual to management positions.
The Challenge...
With the purchase of their new home, came the need for updated financial protection. Their existing life insurance and income protection plans were based on outdated circumstances and did not reflect their current needs, especially with their new mortgage payments being more than double what they previously were and extending over a longer term.
Our Approach
Understanding their desire for comprehensive coverage that could secure their mortgage in the event of either's passing, we revisited their protection strategy. A new decreasing life cover policy was recommended to align with their current mortgage, ensuring that in the face of adversity, the remaining partner wouldn't bear the financial burden alone.
Moreover, considering the significant increase in their mortgage payments and the shift in their occupational risk profiles, I advised adjusting their income protection to cover 60% of their gross salary. This update not only safeguarded their mortgage payments but also some living expenses, offering peace of mind up to the age of 70.
Budgeting for Protection
The couple had set a budget of £160 per month for their overall protection, including home and contents insurance. Within this budget, I managed to integrate an enhanced critical illness cover of £50K for each, an important addition as they plan to start a family soon. This coverage also includes children’s cover, ensuring congenital conditions are accounted for, reflecting their forward-thinking approach to family planning.
Outcome
Through a detailed review and understanding of their updated circumstances, we were able to tailor a protection package that not only met their immediate needs but also provided a robust safety net for their future plans. Their story is a testament to the importance of regularly reviewing and adjusting financial protection plans to reflect life's inevitable changes.
How we can help you
Has your life taken a turn, bringing new financial scenarios to navigate?
Concerned about how changes, like increased mortgage rates or career shifts, might affect your protection needs?
We're here to help. Connect with us at 01202 090 008. Together, we'll review your situation and craft a strategy that safeguards your financial well-being.
At NEST, guiding you through each change and decision is what we do best.