Smart Loan Shop

In these times of financial insecurity people are being forced to analyse their monetary standing with the view tighten their belts wherever possible. Bizarre as it may seem, one of the first things to be discarded when looking for ways to ease their outgoings is one of the most important with regards to future financial wellbeing, Life insurance.

With my background in finance, it never fails to amaze me how some people go about assessing what is important to them. That priority be given to a Sky TV contract over a life insurance policy is nothing less than astounding to me. It is for this reason, and the fact that a lot of my clients are seeking advice before making any cutbacks, that I feel this article to be of utmost importance.

I often think back to a story about a man who on setting off for work one morning crashed his car and was tragically killed. The car was obviously written off and was an outright insurance claim. A few weeks later, two insurance men approached the home of the man’s widow, each with a cheque in hand. The cheque for the man’s life read 20,000 whereas the one to replace the nice new BMW he drove was for 25,000.

The question to be asked here is, with these two cheques, what do you suppose the widow is in a position to replace first, the support given by her husband or his flash car? Sad but true. What I am trying to get across is that we have become, as a nation, more preoccupied by the value of our things that we are undervaluing ourselves. This is particularly evident now when cash flow is a pressing issue for everyone.

If you happen to be in the situation where you are analysing your expenses and are trying to decide whereabouts to start trimming the fat bear this in mind before you consider your life insurance. You took out your life insurance policy for one main reason. That if anything were to happen to you in the future, your family would be taken care of financially. Especially now that the credit crunch is bearing down on us, it must surely make sense to anyone who give it thought that continuing your policy is much more important to both yourself and your family than being able to watch the latest American comedy on cable.

Now this article is not meant to be scaring anyone into keeping on your life insurance payments. Scaremongering is not part of my business. What happens to you and your family is of little concern to the likes of me. What I do know, however, is that as a professional financial advisor, I deal with bereaved relatives on a day to day basis. Some of the deceased have life insurance, often not much, and some have none at all. What they all have in common is that they all say they wish they had planned better for the tragedy that has befallen them.

I can only give advice to people face to face if they knock on my door, but hopefully by writing these articles I can reach a larger audience in order that the right choices be made when planning ahead.

One thing I would definitely urge is that if you are finding money tight, which of course the majority of us are in the present climate, and you are considering doing away with your life insurance in order to free up some extra cash, please do one thing and consult your financial advisor before taking any drastic action. You may not know that if you have had any health issues since originally taking out the plan and you then stop the plan, you may not be able to restart the insurance plan in the future. You could even consider the possibility of transferring to a cheaper plan. It may not give the same amount of protection as before, but it may save you a bit of money in the meantime, and at least you will be partially protected, which is the important thing after all.

Tweet This Post