Is Your Family Insured Against The Worst -Discount Handbags

Critical illness cover, income benefit, income protection and plain old life insurance are aimed at replacing an income in case the unthinkable happens.


Mothers, it seems, even if they stay at home need life insurance or other forms of protection.

Research by Legal & General suggests the cost of replacing the work mothers do in the home is ￡32,812 per year.

This is higher than the average UK annual salary and a large sum to replace if she was no longer able to care for the family or contribute to the household income.

Matt Morris, at LifeSearch, says: "The value that mothers provide to the home through daily activities is massively underestimated."

Women spend on average 74 hours a week on household chores and childcare, while men spend 53 hours.

Full-time mothers put in about 82 a week work into the home, making them cost ￡36,036 to replace..

Working mums that work full-time still put in a hefty 55 hours a week and are worth ￡24,492 - plus the income they bring in.

Alan Ferguson, at Legal & General, says: "Mums are a rock for many families, making sure that the home runs smoothly.

"Families need to ask themselves how they would cope with all the domestic work and childcare that Mum does if she wasn't around "

However, just 53 per cent of mums have life insurance, 26 per cent have critical illness cover, 20 per cent have income protection and 17 per cent have family income benefit.

Mr Morris explains: "Don't wait till something happens before you look into protecting your finances. By then it may not be possible to be accepted by an insurer and the effects on family finances can be devastating.

"Unfortunately very few consumers actually realise the choices that are available to them and many either buy the wrong product or get a bad deal."

Families have numerous choices on products they can use to protect themselves in case something would happen to either parent.

Justin Harper, at LV=, says: "Buying cover to protect your income is not as expensive, nor as difficult, as many people think."

Family Income Benefit (FIB)

FIB works the in same way as a life policy, but pays out a regular income rather than a lump sum. Potentially it can even pay out more than double the amount of a lump sum.

The policy is taken out for a certain amount of years, and benefits are paid from the time of death of the policy holder until the policy expires.

For example, if a FIB policy is taken out for 20 years and a claim made after 16 years, benefits will be paid for the remaining four years.

The cost of FIB can be as low as ￡5 a month. It is suggested that this type of policy is taken out along side mortgage protection (or something similar) to make sure there is enough money to cover financial obligations.

Mr Ferguson states families ought to evaluate all types of insurance to ensure they are covered in a worse case scenario situation.

"Given the economic backdrop, now could be a good time to consider how to protect your family against financial hardship," he says.

Income Protection (IP)

Many insurers think income protection insurance should be top of most people's financial protection list.

Rather than paying out on death, income protection insurance replaces your salary if you suffer an illness or disability that prevents you from working.

Some employers even provide this type cover as part of your overall employment package - so it is worth checking.

The policy pays a monthly tax-free income until you recover even up to right up to retirement. The payout on income protection insurance can be flat or set to rise with inflation.

The maximum cover you can have under an income protection policy is typically half of your gross income, but the payment is tax-free.

Mr Harper says: "Anyone who has been through the trauma of losing their income through illness, an accident or redundancy and without any type of protection cover in place, would be the first to recommend some kind of cover to protect their income.

"For a modest monthly outlay people can protect what matters most against the financial effects of long term sickness, accident or unemployment, so they will not be left short if the worst happened."

Income protection is often available for housewives who are either not employed or who work less 16 hours per week.

Life insurance and critical illness protection

Life insurance, in all its various forms, provides a payout when a policyholder dies to assist with any costs the may arise.

Critical illness insurance will pay you a tax free lump sum on diagnosis of any one of a wide range of specified illnesses including certain types of cancer, heart attack, stroke, brain tumour.

Unlike other types of cover, life insurance won't pay out unless you die or are diagnosed with an illness which will be terminal within 12 months.

Mr Ferguson says: "Life insurance and critical illness cover can help provide peace of mind that a family could maintain its living standards if Mum wasn't around."

Key insurance tips to remember

1. Look beyond a joint policy.
Many people in a relationship assume they ought to be looking at a joint policy.

Although two single life policies cost five to ten per cent more, they pay out twice.

A joint policy will only ever pay out once. Also if the couple splits up, they can each take their own policy with them.

2. For mums who work or not

Considering how much it would cost to replace the work a mother does inside then home, it might make sense to get cover for a stay-at-home mother as well as a working mother.

3. Do not rely on state benefits.

"People shouldn't assume that extended family or the state will fill the gap," Mr Ferguson explains.

A woman earning ￡35,000 would get ￡242 per month from the state. The average family, however, spends ￡132 a week on the children, meaning more than double the state benefit would be needed per month simply for childcare.

By spending about ￡29 month on income protection, however, a mother could guarantee herself a monthly income of around ￡1,500, potentially until she reaches retirement age.

Is Your Family Insured Against The Worst

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