A new baby is a wonderful time for everyone, a time to celebrate and rejoice and all of us at Christopher Little & Co would like to extend our congratulations to Wills and Kate on the arrival of their bouncing baby boy! At this time I’m sure all that is running through their minds is how happy they are with their little Prince and of course the usual: do they have enough nappies? When will they have a full night’s sleep again? Where will his first public outing be? How to stop the grandparents being too hands on? The stuff all new parents think about!! However, are these the matters that should really be at the forefront of our young Royal couple’s minds? Especially having just been blessed with their new arrival.
Often having a baby brings you back down to earth with a bump and forces you into getting ‘back to basics’. Here at Christopher Little we believe in the importance of getting the basics right. As we all strive to move through a life cycle and this always looks different for every individual, every twist and turn in the plot leaves a need for protection, whether that be life or income protection. It may not be glaringly obvious but let’s take a further look.
1) Earning your living: You are now reliant on your income, possibly saving for your first house and more than likely taking on financial liabilities (often without realising) such as finance for your car, a loan, credit cards. Without your all-important income you are suddenly at a standstill. Any savings you had will start to be depleted and eventually gone, the intention of saving for a mortgage now further in to the future, those monthly repayments for your credit cards and car finance still need to be made, how are you going to pay these? People take for granted that they will always be well enough to work, but if you aren’t what happens then? Why not start as you mean to go and make sure your income is protected, and you can continually meet your liabilities in the event of a loss of income.
2) Buying your castle: Now you have just taken on the biggest financial liability there possibly is for a rather significant amount of time (because obviously property like Buckingham Palace or Balmoral Castle costs a fair bit!). This debt is going to need repaying month on month, along with the other liabilities you had accrued before (don’t forget that car of yours!) as well as those committed outgoings which you gain after a house purchase: your buildings insurance, utility bills, council tax, water rates etc etc. What happens if you can’t make these payments? You could quickly find yourself in significant financial difficulty. The end result can quite quickly and easily be repossession of your home, not a pleasant thought for anyone. Make sure you have the relevant protection in place which means the end result would be very different.
3) Getting married: Hopefully by this point you will have managed the incredible feat like William and Kate did and have found your destined to be soul mate. In which case you have no doubt moved them in before tying the knot. The addition of a second income means more money in the house, therefore you are going out and buying more (second car perhaps!?), clearly enjoying a more luxurious lifestyle and altogether both becoming reliant on each other’s income. What happens then if one income suddenly ceases to exist? There may well be still two of you to manage on one income, all those liabilities still need paying the mortgage, those 2 cars, all your bills and so on, is one income enough? What if it isn’t, what then? Even worse there may only be one of you left to pick up the pieces of a lost income due to an untimely death, how does that person cope? Just because you die doesn’t mean your debts die with you, your soul mate gets to inherit those as well as the house, the resident corgi and that silver service that was your great grandma’s wedding present from Mrs Simpson round the corner, I’m sure you get the point! The bank may need to look at selling on that castle of yours! Would you not prefer to protect your greatest asset?
4) The Arrival of your prince (or princess): I feel like we have come full circle to the beginning of this article however, we have a long way to go yet, possibly about another 18 years because that is quite easily how long your bundle of fun could be milking you of money for, as well as the other half, and the mortgage lender and all those other lenders for the 2 cars, the utilities providers etc etc. Again I’m sure you get my point here, and again what are you going to do when that money isn’t there to satisfy all these regular outgoings your household has accrued over the past however many years? Is this now a risk you are willing to take gambling yours and your family’s life style on not having any protection in place when you and them most need it?
Income Protection is there to give you peace of mind that throughout your working life you will be able to receive an income even if you are too sick to work or unable to due to an accident. Therefore ensuring you are able to make those payments that HAVE to be paid, month in and month out!!
5) The quiet life: Hoorah you have made it on life’s rollercoaster to retirement! The kids have flown the nest, and all being well you and your soul mate are still in it together, the mortgage is paid, as is the majority of any other liabilities. Your income is a guarantee as it is now provided via your pension not your employer. Surely you don’t need any further protection you are thinking? Maybe, but maybe not. The average cost of dying in 2012 was £7,114. Funerals make up £3,284 of this total with things such as legal fees making up the rest. With two of you around that can amount to £14,228 and these figures are increasing year on year. With the option of a state funeral more than likely out of reach then it falls to your Prince and Princess to part with the cash to fund these necessities. What happens though if they do not have the money? Surely they are already upset and stressed whilst dealing with this difficult experience, money woes on top can make things so much worse. Why not put in place a plan that can alleviate that stress from the loved ones you leave behind? Have the funeral you wanted and know it can be paid for.
Life Assurance lets you and your loved ones know that after death, whatever is left can be taken care of quickly and easily. That remainder of a mortgage can be cleared, as well as other outstanding debts and a funeral paid for. Often without these policies a difficult and stressful time can become a whole lot more difficult and stressful, especially financially!
This is a very crude and basic model, but clearly highlights the different needs you could have for protection. A review of your financial protection costs nothing with Christopher Little & Co and is a quick and pain free process. Once done many clients find it a very positive and enlightening experience as our advisers can quickly highlight to you if and where protection maybe needed, how much protection is needed and the ideal solution for you. It is also worth noting as well that as your life unfolds those needs can quickly and dramatically change so the need for regular reviews with your adviser is paramount to how effective your cover actually is.
So all said and done, pick up the phone today and call us to book an appointment at a time that suits you to review your protection needs, and ensure you are as financially protected as possible. That means you too Kate and Wills!