Still with me? Good - because it's time to confront some uncomfortable truths. First and foremost, every one of us is going to die. We all know this as a fact - we just don't know when and how. It's also the case that a fair proportion of us are going to suffer a major illness or accident - something serious enough to force us off work or deem us incapable of looking after home and children.
Take heart and circulatory disease - the main cause of death in the UK. In 2009, according to the British Heart Foundation, over 180,000 people died from cardiovascular disease. It accounts for 28% of premature deaths in men and 20% in women.
Then there is cancer which, in some way, will afflict one in every three of us. According to Cancer Research UK, every two minutes in the UK someone is diagnosed with the disease - that's around 850 people every day.
So, grim though it may be, all of us need to accept that we are vulnerable - and, crucially, we need to do something to protect our financial situation. Here we explain why it is so important to adopt a responsible attitude to
life insurance and critical illness cover so that financial problems don't make a terrible situation even worse.
The facts of life - and death
The basic fact is that, if you died, your dependants would immediately face the prospect of financial hardship. And that doesn't just apply if you're the family breadwinner. If you stay at home to look after the children, think what would happen if you were no longer around or you were too sick to cope with the demands of housework?
Presumably your spouse or partner couldn't stop working to take on your duties, so other arrangements would be needed - and that might mean expensive childcare, cleaners and other paid-for help.
The mortgage or rent would still need to be paid, as would all the other household bills. These would burn through even substantial savings in a short space of time. And that's without considering other occasional expenditure, such as holidays, birthdays and Christmas and big-ticket items such as repairs to the house, upgraded household appliances and a new car.
MoneySupermarket research puts the value of a Mum at £578 a week once cleaning, cooking, childcare and driving are taken into account. The annual financial value of a full-time stay at home Mum
is over £30,000 - and even when she is in full-time employment she's worth £21,000 to the household economy.
When you think that the average male salary in the UK is under £31,000, you can see how the loss of either partner would cripple the family finances.
Life insurance policies should always be written 'in trust' so that the benefits go straight to your chosen beneficiaries and don't get tangled up in your estate affairs - where they could be liable to inheritance tax at 40%.
Protection falls out of fashion
Official figures just released mean the country is now officially in recession - but many families will feel they have been in recession for years. And when money is tight, items of expenditure inevitably come under scrutiny - and insurance premiums are no exception.
According to Scottish Widows, the number of people taking out life insurance and critical illness cover is declining year on year. But 60% of adults would only last for six months if they had to survive on their savings. Just under 30% said they would have used up their savings within a month if they lost their income.
Richard Jones of Scottish Widows said: "It is worrying that people are not protecting themselves in the event of unforeseen events. Many do not have the provisions in place to support their families for any substantial period and even after just a month could be left with no buffer. It is at times like this that families need to do all they can to protect themselves in the event the unexpected happens."
A question of priorities
Scottish Widows also found that more people consider tangible items like having broadband (74%), a car (75%), a phone (57%) and home ownership (57%) as essential compared with protecting their family against critical illness (29%) and loss of income (23%). More than a third of people view protecting their family in the event of illness a luxury.
If you have a partner, you can arrange joint life insurance and critical illness cover. But check to see if two separate policies would work out cheaper. If a claim is made on a joint life policy, the survivor would normally be left without insurance of their own.
There are many factors to take into account when arranging protection insurance. When deciding on which policy is right for you, consider:
Type of policy. Do you want protection for a specified term (such as the duration of your mortgage or until you retire) or do you want cover for the whole of your life?
Whether it makes sense to take life and critical illness insurance on the same policy. This would cover your death as well as any of a list of serious diseases and incapacitating injuries and might be better value than two separate policies.
How much cover you need. One suggestion is that you set the sum insured for 10 times your annual income. But chew the figures over to decide what's right for you - the higher the sum insured, the higher the premium.
You can quickly and easily gauge how much it would cost to protect your family's financial wellbeing
It's a swift and straightforward process to change the key details of the quote to check the level of premium for life insurance on its own, and with critical illness cover added in.
The crucial factors are your age, gender, how much cover you want and for how long. When you actually buy a policy, there will be many more considerations, not least your health. You'll need to answer a detailed questionnaire about your own health and your family's medical history and, in some cases you'll need to undergo a medical examination.
With this kind of product it is good to talk to an impartial expert without the worry of a hard sell approach.
The MoneySupermarket advice team provides a free service where they search the whole market and identify the best deal for you. They'll even fill in the forms. Call them free on
0800 142 2023.
direct. Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply
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