Protecting what matters most in your life isn’t just about taking out the different types of insurance we need. It’s also about deciding how and where to put savings aside.
When it comes to securing your financial future, you have options. Insurance can protect you and your loved ones while also being a useful saving mechanism. But if you look at how to evaluate your risks over time, you’ll find other protection solutions to ensure you’re financially prepared if things go wrong.
Many of us will probably have longer retirements than planned, thanks to improved living standards and better healthcare. That’s why it’s important to consider your financial future as soon as you can and start putting savings aside for retirement.
The longer you're able to save, the more comfortable your future will be, and the more effectively you can support family and loved ones. We discuss planning for your retirement in more detail in our guide to Healthy Financial Habits.
Choosing the best ways to secure your future depends on several factors, including:
Here are 2 common ways that insurance can help:
Before taking out an insurance policy to protect your financial future, it’s worth reviewing whether you already have any cover. For example, your workplace benefits may include income protection insurance or access to attractive rates negotiated with providers. Your employer may also be obligated to pay you if you can't work because of sickness.
Here are some of the more common options to consider:
Family health insurance policies differ widely, but may cover:
Some health insurance policies include provision for other medical support, including dental care, eye care, physiotherapy, mental health support and pregnancy or maternity services.
Having a will is probably the most important action you can take to make sure your loved ones are protected and cared for after you die.
Your will is a document that lays out what should happen to your money, possessions and property. If you don’t leave a will, the law will decide what happens, and this may not be in line with your wishes.
A will is about more than just money. It’s also about deciding who should look after your children (if you have any) and putting financial arrangements in place for loved ones.
You might consider financially supporting a child or loved one by putting savings aside for their education. You could also give children a head start by saving towards their future retirement.
As with all savings, the earlier you start, the larger the savings pot will be when it's needed, and the more interest (and compound interest) you will have earned on the sum invested.
As life expectancies rise, one consequence is that more people are caring for an elderly parent or other relative.
How you care for them, and your role, is a personal choice. However, it can require specialist help and support, and you may need to stop working or reduce your working hours.
This is a legal document giving someone else the authority to manage your bank accounts and financial affairs.
You may suggest that your partner, parents or grandparents consider setting one up. It can be a sensible precaution to take, as you could help them with their finances if they were to get dementia, suffer memory loss, or become hospitalised.
However, this is not a decision to take lightly. Before giving anyone power of attorney, consider getting professional help or legal advice.
