Protection Insurance for Future LGBTQ+ Parents: Planning for Your Growing Family
Guest blog by Jamie Lowe, from True Self Wealth
Congratulations on your journey to parenthood, whether you’re already parents or on the path to becoming parents! No matter how you plan to be a parent, there’s some planning to do. While the Proud 2 b Parents team will help you with many practicalities, I’m here to guide you through the financial aspects.
In this blog, I’ll discuss some of the different types of protection insurance. The main types I want to cover are life insurance, critical illness cover, income protection, and private medical insurance. These policies provide a financial safety net, ensuring that, should anything unexpected occur, you’re prepared for the financial implications.
Life Insurance
Life insurance provides a financial amount if you die. That’s probably not surprising, but you might not know the types. So here’s an overview of them. There is a Family Income Benefit, which provides a regular amount for a particular amount of time. For example, it could give your beneficiaries an annual income until your child is 21. It’s a relatively cost-effective way to get life insurance because if your child were 4 when you die, the insurer would only make the payments for 17 years. Many people will find it relatively easy to work out how much cover they might need because they will probably consider replacing some or all of the wages they would have earned. And, here’s a biggy, the idea of receiving a lump sum is overwhelming for a lot of people. Family Income Benefit prevents the beneficiaries from having to calculate how much to spend and when, and, if they need to make it last they might consider investing it rather than leaving it in the bank, which could be a sound decision. But, it is yet more decisions to make.
Decreasing term assurance is a life insurance policy in which the amount of cover, or the sum assured, decreases over the term. You could use a lump sum to pay off debts where your debts decrease over time (like your mortgage or loans). You might not have changed your borrowing, but this is a great opportunity to double-check that your cover is enough and lasts long enough to cover debts. There will usually be an interest rate limit so if you took out a life insurance policy 5 years ago with a 4% maximum interest rate and now your mortgage interest rate has gone up, your life insurance might not be enough. If you have borrowed extra or changed the term, it’s especially important to review your cover. Level Term Assurance covers a lump sum, but the amount stays the same.
The amount of the payout doesn’t reduce but inflation can reduce how much you can buy with it over time, so it’s possible to add inflation growth into the amount of cover. It’s a standard way to put insurance in place. It provides more flexibility than Family Income Benefit, but with flexibility comes responsibility, as I mentioned above, that means making decisions.
Just remember, part of my job is to help with things like this, so if a lump sum is more practical, remember that I’m here to help, and you can leave my contact details with your policy information to give your loved ones support. Whole of Life insurance lasts for the whole of your life. The other types of insurance have an end date, but these policies have a guarantee so as long as you keep paying for it, the cover will stay in place. People often use them to ensure their beneficiaries get an inheritance, to cover funeral expenses or the inheritance tax their estate would owe.
These are types of insurance for individuals. If you run a business, you have many more options, but I’ve left those out to avoid this turning into an eBook. If you run your own company, you can use my contact details below, and we’ll make sure your insurance is the right product, tax efficient, and cost-effective. If you feel confident in arranging your insurance, please go ahead. But if you don’t, I can help you with the cover. It’s my job to tell you which type of cover is appropriate, how much cover you should have, and how long you need it. We can also work together to find something within your budget.
Critical Illness Cover
The critical illnesses covered by insurers vary, so it’s essential to review the details carefully. Some policies also include partial payouts for less severe conditions, which can offer additional flexibility. There are a few things to remember when considering critical illness cover. Firstly, not all illnesses or stages of illness are covered, and pre-existing conditions are usually excluded. Secondly, most policies have a survival period, in other words, you need to survive a set number of days after diagnosis to qualify for the payout. This type of cover is a great complement to life insurance, as it provides financial support for you and your family during a health crisis. It’s particularly valuable if you’re the primary earner or have dependents relying on your income. If you’re unsure about the right level of cover or which policy suits your needs, don’t hesitate to reach out. As with all types of insurance, I can guide you through the options and help you make an informed choice that fits your family’s circumstances and budget. Just so you know, I have tools which make it easy to compare your priorities in Critical Illness Cover. For example, I can show you what your existing insurance covers and how much it covers you for compared to new policies available, and if there’s a price difference.
Income Protection Insurance
Income protection insurance is designed to provide you with a regular income if you’re unable to work due to illness or injury. Unlike critical illness cover, which offers a one-off lump sum for specific conditions, income protection ensures you have a steady flow of money to meet your essential financial commitments, such as mortgage payments, utility bills, and childcare costs. One of the great things about income protection is its flexibility. You can tailor the policy to suit your needs, such as choosing the percentage of your income you want to protect and setting a deferred period. The deferred period is the time you need to wait before the payments start— this could range from a few weeks to several months. Aligning this period with any sick pay your employer provides can help you keep premiums lower. When deciding on income protection, it’s important to consider your existing financial safety net, like savings or employer benefits. This type of cover is especially valuable if you’re self-employed or don’t have access to a comprehensive sick pay scheme. Another point to bear in mind is that most policies will not cover pre-existing conditions. However, they will typically cover a wide range of illnesses and injuries,
including mental health conditions, which are a leading cause of long-term absence from work. If you’d like to explore whether income protection is right for you, I can help you compare different policies and providers. Together, we can find the best option to suit your needs and budget. How I help people Protection insurance might not be the most exciting part of planning for parenthood, but it’s one of the most important steps you can take to secure your family’s future. If you’re unsure where to start, I’m here to guide you through the options, explain your choices, and find solutions that fit your circumstances and budget. And, very importantly, I can help you navigate the application process, which is especially important if you have existing medical conditions. Here are my contact details to ask questions or get new cover, or if you want help reviewing your existing insurance.
Jamie Lowe
Phone: 07469 712299
Email: www.trueselfwealth.co.uk
Book a chat: www.calendly.com/jamie-lowe-tsw
True Self Wealth Ltd is an Appointed Representative of and represents only St. James Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group, wealth management products and services, more details of which are set out on the group website: http://www.sjp.co.uk/products.
