1. When should I get financial advice?
Almost everyone will benefit from getting financial advice at some point in their lives. It is often at times of transition or change in our lives that our thoughts turn to our financial security: marriage, having children, buying your first property, death of a partner, approaching retirement etc. are all events that prompts to seek advice on how best to approach their finances, what they should be doing and how to prepare for their future, financially at least.
2. Mortgage Protection – do I really need it?
One of the most common queries we encounter relates to mortgage protection. Mortgage protection is a type of life insurance designed to pay off your mortgage if you were to pass away, with some policies allowing you to add cover in case you become disabled, are diagnosed with a specific illness such as cancer, suffer a heart attack or stroke and become unable to work.
It is important to check if your mortgage protection is dual or joint, most are joint, meaning that only one person is covered. Dual cover is also available, but only from some companies, providing double the cover at no extra charge. This can be explored with a financial advisor.
While mortgage protection makes sense for people with mortgages, what about the renters? More and more people do not own a house. If you happen to be a renter, it is important to explore Renters Protection, a type of cover most renters don’t even know about it. Again exploring this with a financial adviser will help you to get the right your circumstances.
3. Life Assurance
My firm deals with so many misconceptions about life assurance. So let’s keep it simple, life assurance is effectively an agreement between a life assurance provider and you, the policyholder. In return for a payment from you, the company pays someone (known as the beneficiary) upon your death.
Most policies are for a term, for example 10 years, and it’s important to ensure there is a conversion option, meaning you can continue to pay the policy at the end without any further medical evidence being required. There are also polices available that continue for the whole of your life. Some have the option of stopping the premiums and getting free cover for life, or cash back after 15 years. All options can be discussed with a financial adviser.
It is vital the information supplied to the life assurance company is correct and that you pay the premium. It sounds obvious, but I’ve dealt with difficult cases where the company will not pay out in the event of death, because things were not in order.
When it comes to buying a new home, many people put the cart before the horse and look for a mortgage when they have found their dream home. I don’t recommend this because it can lead to disappointment. Discussing things with an adviser allows us to work together to prepare your application, giving you a better chance of securing a mortgage with a better deal.
It’s not just when purchasing a new home or investment property that advice helps. Talk to an adviser before fixing your mortgage rate as there may be better options out there, and switching mortgage is not such a big deal anymore. Some lenders will even pay you to switch.
There are also other reasons, for example, one lender allows you to make overpayments that can save you thousands in interest with the option of getting these overpayments back at any time, should you need to.
5. Savings and Investments …
If you are lucky enough to have some money that’s not accounted for, then you’re probably one of the many that has it sitting in a bank account on deposit. That’s fine in the short term or for small amounts, but for larger amounts or for longer terms you should look at the other options available.
Deposit rates have fallen through the floor and are not likely to improve any time soon. There are various options with various levels of capital protection and there should be something to suit everyone. Just get advice.
Next week, we will be looking briefly at Pensions and Income Protection and Specified Illness to name but a few.