Families pick satellite television over life insurance

Families pick satellite television over life insurance.

Recent figures have revealed that more families have satellite television than life insurance – in fact half of families have satellite TV but just 40% have life insurance.

The report also found only 13% of families had critical illness cover while 14% had insurance for their mobile phone.

Similarly 13% had taken out an extended warranty on electrical items, more than the 10% who had taken out income protection insurance.

The report found that over a quarter of families, 27% admitted they did not want to discuss their debts with their family. The only topic that made families more uncomfortable than finances was sex at 56%.

No-one likes to dwell on poor health or mortality but by denying that illness or worse, people are stopping themselves putting measures in place to protect their loved ones.

Too many people assume that someone else will step in and look after their families if they weren’t there to provide for them but the reality is very different.

People needed to ask themselves just how they would pay for their accommodation, their food and all the other costs of living, should they suddenly lose an income.

While no-one likes to think about “what-ifs”, by not even considering these scenarios, people could be putting the future financial security of their families at unnecessary risk.

So many customers report feeling peace of mind when they take out life cover and knowing their affairs are in order, so we’d urge families to overcome their taboos and put protection in place.

Jimi Hendrix , Diana Princess of Wales, Barry White , Bob Marley and Jill Dando.

What have the following people got in common ?

Jimi Hendrix , Diana Princess of Wales, Barry White , Bob Marley and Jill Dando.

Well other than the obvious that they are all deceased, the common factor is that they all died either without making a will or failed to update it before dying.Jimi Hendrix’s family squabbled for years over his estate as he died intestate , and the executors of the will of Diana, Princess of Wales decided to give her god children small mementos, rather than the more generous gifts detailed in a 'letter of wishes'. This was attached to her will, but was not legally binding.

30 million people in Britain don't have a will – about 70 per cent of the population – according to unbiased.co.uk, the financial advisers' website.

As well as making life easier for your dependants, making a will can help reduce the tax payable.

So what should you put in a will and what will happen if you don't have one?

If I die intestate, what will happen to what I own?

If you die intestate, which means without making a will, your assets will be distributed according to the law, and not according to your wishes. Jill Dando and Stieg Larsson, the author of The Girl with the Dragon Tattoo, are among those who have died without leaving a will and whose estates were inherited by their fathers, not their partners.

In England and Wales, if you are married with children, you might assume that all of your assets would go to your spouse. However, if your estate is worth more than £250,000, your partner will only get the first £250,000. They will get a life interest in half of the remaining estate, which means they can't get rid of it or spend it, but they are entitled to the interest.

The remainder will go to the children. If your assets are worth less than £250,000, your children will get nothing.

If you are not married or in a civil partnership, your partner won't inherit under the intestacy rules. Similarly, if you have separated but not divorced, your ex-partner will inherit the first £250,000 of your estate.

If you are childless and single, various family members could take varying shares of your estate. If no one claims it, the Government will take the lot.

That's not great. How do I go about getting a will?

You can make your own will, as long as you get it witnessed and have all of the formal requirements within it. If your circumstances are fairly simple, you could consider using a will-writing kit, which is available from stationers. However, a will that is badly worded could lead to relatives being saddled with massive legal fees.

It is possible to use online services where your will would be checked by a professional. For a full will, which will help your family to avoid tax and trauma after you die, it's best to talk to a solicitor. Using a firm regulated by the Law Society (www.lawsociety.org.uk) will mean that you deal with a qualified person, and also that you have some consumer protection.

Will-writers, on the other hand, are cheaper, but not regulated.

What issues should I consider when I make a will?

Do everything you can to make sure that your wishes are not contested. Make sure you do not ask any of the beneficiaries of your will to help draft it. Older people may ask grown-up children to help them write a will, but this means the will could be challenged by other potential beneficiaries. Make sure your will is properly signed and witnessed by two people who are not beneficiaries.

You will need to decide who your executors are. These are the people who will administer your will. You can pay for a bank or solicitor to do this, or a friend can offer to do it for free. If you have young children, you will need to appoint guardians to look after them if you were to die.

What about tax planning?

Inheritance tax is 40 per cent, but it is known as the "voluntary tax" because it is relatively easy to get out of paying it with proper planning. Anyone who dies with total assets of more than £325,000 could leave their family with a tax liability. But if you leave your assets to your spouse or civil partner, no tax is payable. If you want to avoid tax and leave money to your children, seek legal advice about setting up a discretionary trust.

How much should it cost?

To save money, check if your employer, union or home insurer offers a free or discounted solicitor will-writing service. If you are on a low income, aged over 70, disabled, or you have a disabled child, www.communitylegaladvice.org.uk may be able to help you.

Where do I keep my will?

If a solicitor has made the will, they will usually store it, or you can pay an annual charge to have it stored at a bank. You can keep it yourself, but this is not the safest option.

How often should I review it?

If you get married, divorced or have a child, make sure your will reflects this. Ensure that it is properly changed – either with an official change called a codicil if the change is minor, or by making a new will. Either way, make sure the changes are witnessed.

The gender of a bread winner is irelevant if they lose their income

The Chartered Institute of Personnel and Development (CIPD) absence management annual survey report recently highlighted that stress is the second biggest cause of short term absences and one of the leading causes of all long-term absences for non-manual workers.

It also highlighted a perhaps previously unknown fact that women are nearly three times more likely to take stress-related absence than men, according to new research.

Analysis using Department for Work and Pensions (DWP) statistics has shown that 74% of stress-related absences were made by women, with only 26% of absences being taken by men.(Absence data from October to December 2010 showed that 31,000 women took sick days citing stress, depression or anxiety, compared to 11,000 men.)

But putting gender comparison to one side,  if stress is one of the leading causes of long-term absence  - what happens if  the condition takes a bread winner beyond the point where company sick pay concludes and their income changes to state benefit?

Would c. £90 pw be enough to cover the costs of running your home ? ………Mortgage , Council Tax , Electricity , Gas , Water , Food , Phone , Internet , Satellite TV, train travel , fuel for car , tax for the car , insurance for the car….it all adds up…..dare one say on the basis of this,  is £90pw enough to ensure that you KEEP your home ?

But what if you could ensure that for the equivalent cost of a shop bought coffee each day , all of the above items would be met ?

Many people do not realise that Income Protection Policies do recognise stress as a condition that would enable a claim to be made – in fact the average claim period for income protection policies is 7 years.

Interested in finding out more ? ……then please drop me a line at mark@themortgagemonkey.co.uk

There is flexibility on both the periods before pay outs happen (to take account of sick pay periods) and the length of time they pay out for (end of the policy term for full income protection and two years for budget income protection (approx 50% lower cost).

Think it wont happen to you ? …..life cover more important than protecting income? I leave you with this thought…..

Income protection policies are only held by 4% of the nation…..and yet income protection policy claims currently outweigh life insurance claims 4 to 1.