As victims of Covid-19 will vouch, contracting the virus is absolutely no joke – even long after the worst symptoms have abated.
Some report shortness of breath, lethargy and brain fog long after the initial bouts of debilitating coughing and fever.
Even the fittest people have been surprised how they have taken so long to be back at 100 per cent and ready to return to work.
In such situations, people’s minds inevitably turn to what effect being away from work will have on their finances.
The pandemic has underlined how protection can provide peace of mind that mortgages and other bills will be paid in the event of such horrible illness.
“If you are off work ill, for example, you may be able to claim state benefits but these aren’t necessarily going to cover your mortgage payments,” notes Paul Johnson, Client Banking and Mortgage Manager at St. James’s Place.
Income protection provides a tax-free income in the event of inability to work due to an accident or illness for a long period.
The amount of cover varies depending on the plan and usually kicks in after a defined period –often six or 12 months. It can run for several years until a return to work or even until retirement.
Critical illness policies pay out lump sums for conditions covered by a plan such as a heart attack, stroke or cancer.
Life insurance, which pays out a lump sum on death, could be used to pay off a mortgage and provide an additional amount of money for your family, depending on the level of cover.
There are other types of cover that can be useful in times of crisis, such as rent insurance, which covers rent payments if a tenant is struggling to meet these.
Whatever the cover, it is important to review policies to ensure that your needs are met.
Paul Johnson says: “If you have life cover on a decreasing term, for example, beware that this may not be sufficient to cover your mortgage if you move or re-mortgage.”
Your adviser at Rhodes Wealth Management can help you to build a protection plan that is individually tailored to meet your needs and adapt it to your changing circumstances with regular reviews.
The levels and bases of taxation, and reliefs from taxation, can change at any time and are dependent on individual circumstances.