Protect Your Family With Life Insurance

New figures are now showing an increase in sales of insurance policies that pay out lump sums when one or both parents’ wages stop suddenly because of injury, illness or even if you were to sadly pass away. So why not protect your family by paying life insurance.

Insurance specialists say sales of ‘protection insurance’ policies was topped 1.5 to 1.6 million last year. Despite the improvement, experts are saying that more needs to be done to make home owners more aware of this financial safety net, which helps to pay bills or clear debt when they can no longer work. There are Million of households that do not have any financial safeguard in place for a number of reasons. They are unaware such specialist policies exist, fear the cost and to keep a deep distrust of insurers. Distrust about insurers start from past scandals such as the mis-selling of payment protection insurance policies. These plans were cheap, unsophisticated, lots of exclusions and mis-sold on an huge scale.

Since the early 2000s the Financial Ombudsman – which go between financial companies and annoyed customers – has been flooded with 1.2 million complaints about ‘Payment Protection Insurance’.Some borrowers were forced to purchase the insurance if they wanted a mortgage or loan, even if they wouldn't have been able to claim on it.

In comparison both income protection and critical illness cover have a good record of paying out claims.

Income Protection

This insurance policy replaces a person’s monthly salary, typically up to 65 to 70 per cent, if he or she is unable to go to work because of an illness, injury or disability.

Monthly payments are 100% tax-free and can help to cover regular bills such as the mortgage, gas and electricity, council tax and food shopping. Around 91 per cent of claims are met. For the nine per cent go unpaid, the reason is often because the policy covers you only for being unable to do any job at all, rather than your chosen career. Good policies should be on an ‘own occupation’ basis.

Many policies pay monthly income for a year while others will pay up to retirement.