We still need to pay rent and eat

Insuring Against Financial Worries Should the Worst Happen

Recently we visited a family of 4. Sue, the mum, had a friend recently pass away quite suddenly, and she saw the impact of the loss on the family not just emotionally but financially as well. This made her think about her own situation and what the implications would be on her family if she or her husband Bob were to suddenly become ill or worst case die. None of us like to think in these terms but having seen first hand the devastation and financial struggles the couple wanted to plan and insure for the worst to protect their family.

Life Insurance Is Not Just For Those With A Mortgage

As Sue and Bob did not own their own home, they had never really thought about life insurance in the event of illness or death as there was no large debt to pay. But the realisation of actually “we still need to pay rent and eat if this happens” made Sue contact Friendly Finance.

Like most families, both of the parents work, to be able to live a moderate life. Sue is the main income provider and has a regular income. Bob is self-employed and contracts out, so his income is not
as regular. They have two teenage children and although not “little ones” anymore Sue sees there still will be a need for financial provision during their University years.

We had an in-depth discussion about how they should insure themselves. Normally when you have a mortgage you start with that figure, plus a little extra, to define your life insurance sum insured. In this case looking into Sue and Bob’s needs they agreed that eventually the surviving spouse would return to work.  However they wanted to ease each other’s financial burden. They wanted to take the pressure off having to return to work immediately, so in the worst case they would be there to support and help the children.

With our advice they decided Sue’s annual income x 2 would be a good starting point for the sum insured. We then looked at any other debt which could be cleared to ease the pressure of living on one income and added an additional sum to cover some costs of the children going to university.

The outcome of this visit is that once Sue and Bob had calculated everything they needed to cover. They feel happier knowing that in the event of sudden death or a serious illness that either one of them would be able to support their children in the time of need. The financial burden would be lifted.

Names Are Changed But Scenario Very Real

We have changed the names to protect the privacy of clients. But this scenario was very real and we regularly see families wisely insuring their financial stability. If you know your family would be financially vulnerable if you or your partner couldn’t work, please get in touch. It doesn’t cost as much as you probably think and the peace-of-mind is priceless.