Why protection should be part of your financial plans to stay on track

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Why protection should be part of your financial plans to stay on track

by RMI Independent Financial Advice Category: News

You may think of financial protection products as something that’s removed from your overall financial plan. But they are an essential part of keeping you on track. Even the best-laid plans can go off course and many outside influences could affect your financial situation. Protection can act as a capital injection at times when you need it most.

There is a range of financial protection products that can provide you with security at uncertain times.

Even carefully crafted plans can be hit by unexpected events and outside influences. Thinking about how these could affect you now, means you’re able to put in place a safety net that provides financial security for your future and plans. Becoming ill, for example, doesn’t have to mean you’re unable to support your children through university if you have the right protection in place.

Protection can provide certainty and security when you need it most. Among the circumstances where financial protection can keep you moving towards goals are:

Being involved in an accident

Accidents occur every day. Fortunately, most don’t cause long-term effects but some can mean taking a long time off work or have a life-changing impact. If you’re unable to work, it could affect your finances, and therefore plans, in the short, medium and long term. If you’d struggle without a regular income, you should consider how financial protection could act as a safety net.

Income protection can provide a portion of your salary, usually around 70%, if an accident or illness means you’re unable to work. This should mean you don’t have to worry about immediate financial concerns, such as paying bills, and allow you the time to get better. Often, income protection will continue to pay out until you’re able to return to work or retire. One important thing to note here is that income protection will usually have a deferred period. You should ensure your employer’s sick pay or your own savings are enough to cover this period.

On the diagnosis of a critical illness

Could you afford to maintain your lifestyle if you were unable to work for a long period of time? Critical illness can affect us at any age and can have a significant impact on aspirations. It may mean you need to make adjustments to your current employment and, in some cases, could mean you’re unable to work at all.

Critical illness can be difficult to come to terms with. Worrying about money can make it even more challenging. A protection policy paying out here can give you the time needed to consider adjustments where necessary and, most importantly, recover. Critical illness cover will pay out a lump sum on the diagnosis of specified illnesses.

On death

If your income is essential for your family’s security, you may be worried about how they’d cope without you. Financial protection can’t help with the emotional stress a death causes but it can relieve some of the worries around money and give families time to grieve.

Having the right financial protection can mean your hopes and dreams for loved ones are still possible even if you’re not there. It could, for instance, help pay school fees for children, support grandchildren getting on the property ladder and ensure your family doesn’t have to give up their home. It’s not a situation anyone wants to think about. But effective planning can provide a safety net for those you care about the most. If this is a concern for you, it’s worth looking at life insurance policies.

Visualising the benefit of financial protection

Understanding how unexpected obstacles could affect your circumstances and plans can be difficult. Working with a financial planner can help you visualise the impact and see how an injection of capital would help at these points.

Modelling your current finances and making assumptions about the steps you’ll take and other areas, such as investment performance, can help you see how you’ll achieve goals if everything goes to plan. But cashflow modelling also allows you to model concerns you may have. For instance, what would happen if you were forced to give up work five years earlier than expected due to illness? Or would your family still be financially secure if you were to pass away?

By modelling these scenarios you’ll be able to see where a shortfall may occur. Your capital and assets may mean you’re still able to achieve aspirations, even when things go off course. But, for many people, a capital injection is essential if they’re still to achieve goals. Through using cashflow modelling, we can demonstrate the benefit of having the right financial protection in place for you with the right level of cover. It can give you peace of mind that, even if the unexpected should happen, your finances can remain on track.

If you’re worried about how your lifestyle and aspirations could be affected, please get in touch. We’re here to help manage your current finances and put safeguards in place to protect your plans where necessary.

What our clients say

I was recommended Paul and Bryony as financial advisers by a friend. My husband and I were particularly interested to think about where to invest our savings. They have helped us to think about what level of risk we are prepared to engage with and explained the different possibilities very clearly and thoroughly, enabling us to maximise the potential of our investments. They also provide regular updates. We have been very pleased with their service and have already recommended them to others.

Dr C Oliver

London

I have been a client of RMI since their foundation. Prior to that, I dealt with the directors for my own personal pension and our business pensions. This relationship as existed for the last 25 years. During this time, I have received first-class support and advice. I have always been kept informed on financial trends and opportunities. To this end I was able to plan retirement early if I wished. More importantly, I was able to choose the right opportunity as when to retire. Since retiring, I continue to receive the highest service and advice on fund management.

Mr. M Moore

Ex General Manager

Leicester

We have dealt with Paul and his staff for over 20 years and have received a first-class service that is completely to our entire satisfaction. We would have no hesitation in recommending the company to anyone who is seeking financial advice.

Mr J Channing

Ex Non-Executive Director, Earl Shilton Building Society

Leicestershire

It’s a great comfort to have Paul Eason and his team on call if I have any queries or concerns about my finances.

Ms M Topham

Oxford

Paul Eason and Bryony Evans have competently managed our investments for the past twelve years. Their service has been managed diligently; they have provided consistency of advice for positive results. This has given us satisfaction and confidence in their ability to handle our personal affairs. Their research and advice are in-depth, concise and clear. They have demonstrated a thoroughness in all aspects of our personal financial planning.

Mr & Mrs S Price

Devon

Following a personal recommendation from a colleague some two years ago, Bryony and Paul provided advice to my wife and myself on planning for my forthcoming retirement. Latterly they have helped another family member on how best to invest a lump sum inheritance. On both occasions, they have guided us through the various options available, indicating the pros and cons in an easily understandable way. They continue to provide regular updates on how the investment is performing. We have always found them to be attentive, knowledgeable and a pleasure to deal with. We would have no hesitation in recommending them to a friend seeking an adviser.

Mr & Mrs P Teasdale

Rutland

When you are investing, you need confidence to make decisive commitments. Paul Eason and Bryony Evans at RMI are true professionals that you can trust implicitly for commercial and personal advice and transactions.

Mr D Matthews

Chairman, Cellular Mouldings Ltd

Northants

RMI not only deal with all our company's employee benefits schemes, but also provide invaluable support for us on a personal level. Nothing is too much trouble and we have found their service to be effective, efficient and friendly. We would recommend RMI to any company or private individual looking for a comprehensive and personal service.

Mr & Mrs I Bates

Ex Directors of The Bright Consultancy Ltd

Bournemouth

Paul and Bryony have advised us for over ten years. They bring strong market knowledge and analysis to provide balanced views for investment decision making. This is then backed up by thorough administration - all delivered in a professional and easy-going manner.

Mr & Mrs I Morton

Concept Shape Ltd

Cheshire

RMI Independent Financial Advisers have been assisting our clients with knowledge and insight into the world of pensions and protection for over 10 years. They have helped many of our company and personal clients navigate their options and meet the legislative duties around pensions and auto-enrolment in the most efficient way, whilst giving them the confidence to plan effectively for their future. We have no hesitation whatsoever in recommending their services to not only our clients, but to other professional connections.

Sunflower Accounts Ltd

Accountants

Wiltshire

Paul has been a trusted adviser to our business for over 20 years and he and Bryony continue to support us with our company pension scheme whilst providing first class financial advice. We would highly recommend RMI for anyone seeking a quality financial advisory service.

Mr J Turner

Managing Director, LINAK UK Ltd

Birmingham

I was looking at my potential retirement options and RMI were able to come up with a bespoke pension solution that enabled me to retire earlier than I had expected.

B Kilfeather

Not knowing how to plan for the future, I required advise about pensions and insurance policies and Paul has helped by being constantly available, calm and pragmatic.

Dr R Singh

Director

Paul was recommended to me by one of his clients and I was looking for a financial adviser who could help with a pension scheme for my employees and also for my personal plan.

Paul helped all the members of my team. He had time and patience and everyone individually with their various circumstances. He was also very helpful with my personal pension during the time I have my business. My personal circumstances have now changed and Paul’s advice has been invaluable.

D Harrison

Business Owner

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