The Seven Steps Of Wealth Coaching - Step 4

Step Four – Build On Solid Foundations

In this series of blogs, we are looking at effective wealth planning and how you can approach it. We have already discussed knowing your goals and your numbers and how to improve your financial health, and a wealth coach can help you with this if necessary. Once you have a full picture of what you have, it is important to protect it against any unfortunate or unforeseen circumstances that could threaten your future.

While it might not be pleasant to consider certain possibilities, it is vital that we do so to protect ourselves and our loved ones.

Protecting your financial wellbeing

- Income-protection insurance

Income protection insurance will cover you for periods when you are unable to work due to accident or illness. If you are employed your employer is only obliged to support you for a certain amount of time before moving you to Statutory Sick Pay. If you are self-employed, you risk a complete loss of income: government benefits you are eligible for may depend on your National Insurance contributions and some are means-tested.

Income-protection insurance can provide regular payments that will help cover your bills in the event of illness or accident rendering you unable to work. However, if you have reached the point where you could take early retirement it may not be necessary. Make sure you know your options: speak to a wealth coach if you need help with this.

- Life insurance and life assurance

Insurance is designed to mitigate against things that may happen. Death is one thing that we all know will happen at some point. Life insurance covers a certain period of time and will pay out if you die within the insured period. Life assurance pays out when you die, whenever that may be.

Life assurance may be more expensive as it is likely to cover a longer period. Life insurance (and assurance) can help protect your loved ones should you die while you are still earning and would potentially be leaving them with debts, bills to pay, and a lifestyle to maintain without your income.

- Medical insurance and critical illness cover

Private medical insurance can help you get treatment more quickly than if you were to wait for NHS treatment. Some policies will potentially cover the cost of expensive treatments or procedures. It is vital to check what will and won’t be covered when you take out a policy: most will have certain exclusions. Most will not cover pre-existing conditions, some chronic conditions, elective treatment, or things that can be attributed to lifestyle factors such as drug or alcohol rehabilitation.

Critical illness cover is a form of insurance that pays out a tax-free lump sum in the event of a critical illness occurring during the policy term. It can be used however you like and is designed to help cover things like medical expenses or lost income.

Make sure you are prepared and protected for any eventuality by exploring your options and speaking to a wealth coach if you need more assistance. Please make sure you speak to an expert wealth coach like Paula Bicknell Wealth Management, as we are trained, regulated, and insured. Please get in touch as we would love to help.

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The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.