Is there still a need for Protection in Financial Planning?

An obvious question, one might say and one which deserves an equally obvious answer. . But when you speak to people about it, you may be drawn to another conclusion.
The reason for this is that people generally overlook the importance of protecting their most valuable asset…..themeselves!

In these days of public service cuts, low interest on savings and credit crunches etc. People generally still insure their homes, in case of flood, fire or theft, they still drive their cars legally ie with motor insurance, tax and mot etc. But ask them what would be the most catastrophic event that would affect their financial well being and very few come up with the correct answer, the loss of a breadwinner through death or suffering a serious illness. There is a general state of apathy out there that says ‘it will never happen to me’ sadly this is all too often not the case, and it does in fact happen to them!

Equally there are people who think that they don’t need cover. ‘My husband will provide’ is a typical reply. Some with the foresight to cover themselves with life cover feel that they are ok. But what would happen if one or other of a couple, or indeed a single person were to suffer a critical illness.? Any life cover at this stage would be useless, for to benefit from a payout someone has had to die. If you’re lying on your sofa watching the bills pile up on the doormat, after you have suffered a heart attack and are supposed to be at home recovering a life only policy gives little comfort. It may force you to go back to work earlier than you would have liked just because of those extra financial pressures.
Then there are those who have done some financial planning but don’t think that paying premiums to a life office is good value for money.
I think that this can be summed up by a quote from a famous Prime minister who said’

“If I had my way, I would write the word’ insure’ upon the door of every cottage & upon the blotting book of every public man, because I am convinced for sacrifices which are inconceivably small families and estates can be protected against catastrophes which would otherwise smash them up forever. It is our duty to arrest the ghastly waste, not merely of human happiness, but of national health and strength, which follows, when the death of the breadwinner, the frail boat in which the family embarked, founders & women and children & estates are left to struggle in the dark waters of a friendless world”
Winston S Churchill

To use an analogy, say Financial Planning was a wheel of a cart, each spoke an area of financial planning. Eg savings, investments, house purchase, retirement planning. Then protection would most certainly be the hub of the wheel, for without it, should something go wrong, then the plans for those held dear would most likely not come to fruition, and the wheel would come off rendering the cart stationary.

Protection can be a minefield. How much cover do I need? What sort of cover should I have? Whilst it is recognised that many people use the internet to source financial products, very few sites actually provide advice. This is where a discussion with a fully Independent Financial Adviser can be most beneficial. He or She can discuss your circumstances, establish the level of need, complete the research across the whole of the market, produce a personalised illustration and arrange the appropriate cover. A good use of time which provides peace of mind.