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Protection should be a core part of your financial plan.

When you think of financial planning, pensions and savings will spring to mind. But, whilst often overlooked, protection should be a core part of your financial plan.

If you are worried illness or injury could leave you without enough to pay bills, there are solutions available. Some people could rely on state benefits as a safety net if they experienced a sudden loss of income. However, for many the drop in income would be too severe to maintain their standard of living.


In many situations, families rely on both partners’ income to pay the monthly bills. Not thinking about the impact losing one income could have on their standard of living. People recognise the need to take out life insurance to pay off their mortgage if they die.

However, some may not think about how their family could continue to pay their outgoings if they became ill, or were injured and unable to work for a long period of time.

If something were to happen to you, would you and your family be able to keep paying the bills? The coronavirus (COVID-19) outbreak has made many of us think more carefully.

Protecting ourselves and our family from financial difficulties has become more important than ever. However, this isn’t just about having savings and investments to provide for the long term. It’s also about ensuring you and your loved ones are provided for should the worst happen.


Have you calculated how much you and your family would need if you found yourself unable to work? This should also take account of your savings and any other income you might have.

Using a Budget Planner will enable you to work out what you’re spending each month, from household bills to general living costs. Having a good idea of your overall budget will make it easier to make changes.

Not everyone will have sufficient savings to manage financially for long periods of illness. Particularly, if this money is earmarked for other plans like retirement or helping children with their education. That’s where insurance protection comes in.

There are a variety of options that could help to cover specific costs, or replace income, should you find yourself unable to work. Which product or solution is right will depend on individual circumstances. Various factors including age, health, lifestyle etc. have impact on the cost of premiums.


Income Protection insurance can provide a regular replacement income. This is if someone is unable to work because of an illness or injury.

Typically, a policy pays out after they’ve been off work for six months (often called a ‘deferred’ or ‘waiting period’). It can pay a percentage of their salary until either of the follow occurs:

  • They return to work
  • Reach State Pension Age
  • Die while claiming


Critical Illness Cover is a type of insurance that pays out a tax-free lump sum, if someone is diagnosed with, or undergoes surgery for, a critical illness.

So long as it meets the policy definition during the policy term and they survive a specified number of days.

It’s designed to help support you and your family financially while you deal with your diagnosis. Allowing you to focus on your recovery without worrying about how the bills will be paid.


Life Insurance Cover pays out a lump sum if someone passes away during the policy term. If you’re diagnosed with a terminal illness and are not expected to live longer than 12 months, some policies will provide the sum prior to death.

It’s there to provide financial support for your loved ones after you’re gone. Whether that means helping to pay off the mortgage or maintaining their standard of living.


Private Medical Insurance Cover is a type of cover that pays your private healthcare costs if someone has a treatable condition.

Whether it’s overnight care, outpatient treatment, diagnostic tests, scans or aftercare, you receive the specialist private treatment you need, in comfortable surroundings, when you need it.

There are a range of different levels of cover at various premiums designed to meet your specific needs.


The possibility of passing away prematurely, getting a serious illness or sustaining an injury isn’t something we like to think about. But being prepared can help you to avoid money worries for both you and your family.

For more information or to discuss any of the issues raised in this article, please contact your adviser, or call us directly on 0161 359 4227.

We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles. All references to taxes and the allowances and reliefs are those available to UK tax payers.  The information in this document is therefore intended only for UK tax payers. The information provided is an overview of our understanding of the tax rules and guidance in place at the time of publication. Levels and bases of, and reliefs from, taxation are subject to change and their value depends on the individual circumstances of the investor. The value of your investments can go down as well as up and you may get back less than you invested. Past performance is not a reliable indicator of future results. The Financial Conduct Authority does not regulate Tax Advice, Estate Planning or Will Writing.

Pareto Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority.

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