Protecting your family

The Covid-10 crisis continues to have a significant impact on the lives of everyday people. Within the financial services profession we have seen the demand for advice increase, not just over fears that taxes will need to rise to repay the escalating debt but a need to provide adequate protection for families after a loved one passes away.

Providing family members with a cash sum on death is often on the “to do list” but during 2020 as the pandemic progressed, protection, for some people, moved to the forefront.

With the average cost of a funeral in 2019 being around £10,000 it can be difficult for those left behind to meet the cost, from the estate, especially if the estate consists of mainly illiquid assets such as the family home. It may be possible to obtain a loan from a bank but by providing life cover and placing this in a suitable trust an individual can make sure their family receives a cash sum quickly.

A whole of life policy is one of the simplest methods of ensuring that a cash sum is payable on death and arranging cover at an early age may mean that the premiums will be lower.

Using a regular premium whole of life policy written under a suitable trust, is nothing new. It is straightforward and easy to understand and arranging the cover when there is more potential for premiums to be lower means that the cost could be more manageable. Placing the policy in trust ensures that the deceased’s family can receive the cash sum before probate is obtained.

2020 has seen people’s priorities change with more clients than ever wanting to protect loved ones from financial hardship and ensure that as much of their accumulated wealth passes to family members and not the treasury. One thing this pandemic has shown us is that the help of a professional adviser is paramount to ensure that the best solution can be found for those new priorities and, the younger people plan, the more options become available.