You might fall into the trap of thinking, “I’ll sort it later”, when looking at financial protection such as life insurance (provides money on death) or income protection (pays you an income if you’re unable to work).
A ‘sort it later’ attitude can be costly.
Securing financial protection early is one of the smartest financial decisions you can make - it saves you money and gives you peace of mind now.
The Costs of Waiting
The need for financial protection often increases when buying a home. We know you have a lot on, but don’t let this slip down your ‘to-do’ list.
Delaying your decision to get financial protection can significantly impact your finances and peace of mind. Here's how:
Premiums increase with age
Life insurance and income protection premiums are calculated based on risk factors, including your age. The younger you are, the lower cost your premiums. Waiting even a few years can lead to a noticeable increase in cost.
See below an example of a couple who would like a joint life insurance policy which will pay out £500,000 on first death until age 70.
Age | 27 | 32 | 37 | 42 |
Term of policy | 43 | 38 | 33 | 28 |
Monthly premium | £33.58 | £43.73 | £58.34 | £79.52 |
Total premiums | £17,327 | £19,941 | £23,103 | £26,719 |
Starting the policy at age 27, rather than age 32 saves the couple over £2,600 over the course of the policy. If they were to wait another 5 years to age 37, the additional monthly premiums are £5,775.
You get the picture. Waiting costs you more money in the long run.
Health changes can limit your options
Insurers take your health into account when pricing your insurances and agreeing the terms of cover. Don’t count on your good health lasting forever, you can’t see the future.
I was diagnosed with Crohn’s disease in July 2021 and since then:
Income protection insurance won’t cover any time off work due to Crohn’s symptoms. (which is a likely reason I may not be able to work!)
Life insurance requires at least 12 months history of no Crohn’s symptoms and some insurers will increase the monthly costs due to the disease.
Some insurers won’t offer cover at all. If I had personal financial protection before diagnosis, I would have cover on the standard terms and would be insured fully.
Opportunity costs of delayed protection
What happens if the unexpected occurs while you’re still uninsured?
Without life insurance, your loved ones could struggle to stay in your current home and meet mortgage expenses, childcare becomes difficult, and your lifestyle will change.
Without income protection, a loss of income due to illness or injury forces you to use your savings and take on personal debt just to get by.
These financial hardships can be avoided by taking proactive steps now.
Take action today: don’t let time cost you
The cost of waiting on financial protection isn’t just monetary - it’s also about the security and stability you risk losing. By acting now, you can take control of your financial future, save money, and protect the people you care about most.
If you’re unsure where to start, speak to us. We can help you understand your needs and find the right policies for your budget and goals.