Push your scepticism to one side, insurance can be hugely useful
As part of the annual review we carry out for all clients, we spotted a Critical Illness plan, set up a number of years ago by a former adviser. So far, the plan had not paid out, despite Mr Bedford suffering from a heart attack.
At the same meeting, Mr Bedford raised the topic of a secured loan, which he had taken out some years ago. The loan had been used to replace the family kitchen, but was expensive, with a high rate of interest.
Ideally Mr Bedford would have repaid the loan from his savings. However, these had been depleted in recent years due to the cost of sending his children to university.
Despite his understandable scepticism we submitted a claim on Mr Bedford’s behalf to the insurer, who after making the usual checks, paid out the sum assured.
The lump sum was large enough for Mr Bedford to repay the expensive secured loan, savings thousands in interest payments, and to top up his savings.
What can we learn from Mr Bedford?
Even the highest earners should make sure they have the right insurance in place; especially if they have dependents.
Despite popular perception, most insurance claims are paid in full and the money received will help your family just when it is needed most.
However, the insurance needs to be set up correctly, to ensure the right money is put in the right hands, at the right time.