The importance of life cover in financial planning for families.
I have been a financial advisor and business owner for almost 20 years and for the first time since I set up in business, I am starting to see several of my clients and personal friends pass away or develop a Serious Illness. While away recently I got news that a client of mine, who had only been in with me recently had passed away suddenly. He left behind a wife and 2 young children. He had a good level of life cover in place on himself but as an advisor did I recommend enough life cover?
It has forced me to rethink my attitude to the importance of life cover and serious illness cover when I am meeting my clients and putting together a financial plan for them. I have always recommended life and serious illness cover to my clients, but it is now going to be one of the first areas that I discuss, and I will be recommending higher levels of cover.
Most people have mortgage protection cover which generally covers the outstanding balance on their mortgage, so that in the event of death the mortgage is cleared. This policy is generally assigned to the relevant lending institution so the mortgage is cleared first and if there is any additional cover this will be paid to the surviving partner.
We would always recommend that our clients put in place a separate life policy and the proceeds of this policy are paid to the surviving spouse/partner or to the Estate.
There are several factors that we consider when recommending the level of life cover and the term of the policy to our clients;
What people need to consider when taking out life cover is, what would be the financial impact for your family in the event of your death? Would your surviving spouse be able to maintain the lifestyle and future costs of your children?
Examples of some life cover costings, these quotations are based on both people being non-smokers and for a term of 10 years
For more information and advice on life cover for families contact Colm Kelly 01 8700370 www.ckob.ie or email colm@ckob.ie