According to a recent report from FTAdviser magazine, under-45s are reacting to current market instability by prioritising long-term planning.
Millennials (those born between 1981 and 1996) and younger generations are keen to look after their loved ones’ financial wellbeing, while mitigating the effects of potential illness and job loss. And yet many remain unprotected.
At Globe IFA, we’ve written before about the importance of protection as the foundation on which all your long-term planning should be built.
This means we’re perfectly placed to help you and the younger members of your family amass secure wealth on the way to your long-term goals.
Here’s how.
Reports find an appetite for protection plans, but myths and preconceptions still prove a barrier
FTAdviser published figures from a Vitality report that found interest among Gen Z and millennials was high for life insurance, income protection, and serious illness cover. Where protection wasn’t in place, survey respondents cited affordability as the main reason.
And yet, insurance doesn’t have to be expensive. Simple advice can help you to find the right product for your circumstances, giving you and your loved ones peace of mind that you are protected, whatever the future holds.
Another popular misconception about insurance is that your policy won’t pay out when you need it. Referencing the same report, COVER magazine confirms that Vitality paid out £142 million in protection claims in 2024, including 98.9% of all life claims. This is in line with whole-sector figures published by the ABI that confirm 96.9% of all protection claims were paid in 2024.
Protection can provide peace of mind and cover job loss, sudden illness, and death
You’ll spend your working life building wealth to pay a mortgage, support your children, and provide you with sufficient income to fund your dream lifestyle in retirement. But the unexpected can strike at any time, so protecting this hard-earned wealth is vital.
You can do this in several ways:
1. Build an emergency fund
Make sure you have an emergency fund to tide you over should the unexpected happen. Accumulating between three and six months of your household living expenses in an easy access account means it’ll be there if you need it. That might be to cover an unexpected expense or maintain financial commitments like mortgage payments.
An emergency fund can provide peace of mind, so be sure to check in with it regularly.
2. Protect your income
If you have financial dependents who rely on your income to cover monthly bills, partly or fully, the sudden loss of that income could cause huge problems.
If you are unable to work, income protection will generally pay out a percentage of your normal income, after a deferred period, and until you restart work. You can claim multiple times throughout the policy term, if necessary, although certain exclusions may apply.
Income protection gives you peace of mind that you’ll be able to pay essential bills even if your income ceases, whether temporarily or for a longer period.
The cost of cover will usually depend on the length of the deferred period, and other factors like age, medical history, and the level of cover.
3. Cover yourself against a serious illness diagnosis
While income protection provides regular payments and can be claimed multiple times, critical illness cover is more likely to pay a one-off lump sum, after which the plan will cease. For this reason, it might pay to have both in place.
Critical Illness cover typically pays out if you are diagnosed with a condition set out in the policy, which usually – but not always – includes a stroke, heart attack, and certain cancers, as well as conditions like multiple sclerosis and Parkinson’s disease.
The lump sum it provides might be used to cover medical expenses or to help make modifications to your home.
The information you provide when setting up your policy must be correct, as inaccurate information could hamper a potential claim. Also, be sure you know what conditions are and aren’t covered, and shop around to find the right policy for you.
ABI data confirms that critical illness claim payouts topped £1.3 billion in 2024, with an average claim of £67,600.
4. Take out life cover
Taking out life cover will give you invaluable peace of mind that your loved ones will be looked after when you are gone. But with so many different types of cover to choose from, advice is vital to ensure you choose the right one for you.
You might consider:
- Term assurance, which pays out a fixed sum (known as a “sum assured” on death within a set term.
- Decreasing term assurance, which pays out on death during a set term, but the sum assured decreases over time.
- Whole of life cover, which guarantees to pay out on death, whenever it occurs. This generally makes whole of life cover the most expensive.
Speak to us before you make your choice, and we can ensure you pick the right cover for you.
Get in touch
Please email hello@globeifa.co.uk or call us on 020 8891 0711 to discuss how Globe IFA’s expert financial advisors can help you manage your long-term financial plans.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
Note that life insurance and financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.
