Managing your finances involves many steps — from planning investments and pensions to navigating your mortgage repayments. However, one vital aspect often gets overlooked – protection planning. Whilst investments and pensions are important for building wealth over time, ensuring your financial safety should always come first.

It’s essential to protect your family and your finances from unforeseen events and circumstances. But what does protection planning involve? And why is it so important to explore it now? As a leading financial planning firm and financial planner in Birmingham, we’re on hand with all you need to know.

Disclaimer: Please note, this article is for informational purposes only. Always consult with a qualified financial advisor for protection planning strategies that suit your individual needs and circumstances. You can get in touch with the team at Kind Wealth for expert support.

What is protection planning?

Protection planning might not steal the spotlight like investment planning or pension management, but its role is equally – if not more – critical.

Protection planning is all about keeping your investments and savings safe in case of sudden emergencies or changes in circumstances. It involves putting mechanisms in place to secure your assets, income, and overall financial stability should life take an unexpected turn.

At the heart of protection planning lies the idea of ‘what if.’ What if an accident or illness impacts your income? What if unforeseen events or bills throw a spanner in your mortgage payments? These are the questions protection planning seeks to answer, providing peace of mind to families and individuals alike.

Protecting your mortgage

For many families in the UK, a mortgage is the cornerstone of their financial responsibilities. More than a loan, your mortgage is the foundation of your home. As such, the main goal of protection planning is to ensure you don’t lose that foundation.

Imagine a scenario where an unfortunate event forces you or your partner out of work temporarily or permanently. The monthly mortgage payments don’t come to a halt, and the threat of losing your home becomes a stark reality. This is where protection planning comes into play.

Protection planning can involve setting up insurance policies — such as critical illness cover or income protection — that will cover your mortgage payments in case of such contingencies. This support acts as a safety net, ensuring that your home remains secure, even in the face of financial adversity.

However, protection planning isn’t solely focused on your mortgage. It can also support your and your family’s standard of living should something unexpected happen.

How insurance and income protection can safeguard your finances and wellbeing

Now we’ve explored how protection planning is essential for homeowners with a mortgage, let’s delve into your protection options.

Firstly, health insurance and life insurance are pivotal parts of protection planning. These policies offer a helping hand when life takes an unexpected twist, shielding both your financial stability and your wellbeing.

Health insurance

In the UK, we’re fortunate to have the NHS, but health insurance can still play a vital role. Private health insurance can expedite access to medical care, ensuring that you receive prompt attention when needed. It can also cover costs that aren’t included in the NHS, such as certain medications, treatments, and specialised therapies. By safeguarding your health, you’re indirectly fortifying your finances against the potential drain of medical expenses.

Life insurance

Beyond its emotional support, life insurance serves as a financial cushion. It can cover outstanding debts, fund education for your children, and provide your family with the resources to maintain their quality of life.

Critical illness cover

In a similar way to health insurance, critical illness cover can offer support if you are diagnosed with a specific condition. You will usually receive a lump sum for this kind of protection planning.

Income protection

Income protection is another vital part of financial planning that can easily be overlooked — what happens if you can’t work but still have bills to pay?

Income protection offers a safety net for when statutory sick pay (SSP) and benefits won’t cover your essential outgoings.

When should you take out protection?

There’s no better time than now to look into protection planning. If you haven’t yet set up life insurance or income protection, it’s a wise idea to explore your options. Many mortgage advisors suggest arranging insurance as soon as you buy your first property, However, it’s crucial to be aware that each insurance provider has a maximum age limit for contract entry.

It’s important to note that the older you get, the more expensive policies tend to be.

Securing your financial wellbeing with Kind Wealth

Protection planning not only supports your finances for the future but also provides peace of mind in the present. At Kind Wealth, we believe that good financial planning is truly life-changing. It’s essential that your financial plan is tailored to your family’s needs and takes unexpected events into account.

Our comprehensive wealth management services encompass protection planning, investment strategies, pension planning, and expert mortgage advice. We’re proud to be one of the top financial planning firms in Birmingham but we also work with families across Worcester, and the Midlands.

For more advice, contact the Kind Wealth team today.

Important Information

Your home may be repossessed if you do not keep up repayments on your mortgage.

Approver Quilter Financial Services Limited & Quilter Mortgage Planning Limited. 14/09/2023