"One British child in every 29 loses a parent while still a minor, so new parents should think about Life Cover. And here’s how it works" said the money saving expert.
Though it was only a few minutes long, it was on breakfast TV and lunchtime radio and then evening ITV, and I hope if you are a protection adviser, your phones and web hits were off the scale like ours were.
Thanks to that story, there are a great many more families now protected against the financial consequences of physical disaster, and that can only be a good thing.
Although some other commentators don’t ever make that case, perhaps because they see protection insurance as a lottery few will win.
But Life Insurance is better described as a very low-cost catastrophe insurance against an event which while unlikely to happen, especially when young, does still happen.
And the low risk is reflected in the low price, which is worth paying because death, when it does happen, can cause such financial havoc to the victim’s dependants. So I can’t see why spending a few pounds a month on Life Insurance is anything other than exactly the right behaviour.
Of course, if you’re young and don’t have dependents you may not want or need life cover. But what all but the poorest or richest of us should then consider, dependents or not, is buying disability insurance to protect ourselves against the financial chaos that is being unable to earn money because we become physically or mentally disabled.
I suspect that many either never hear about proper income protection or are put off by distrust, PPI and tragic unpaid claims stories. But the stats have for over a decade shown that these types of plan pay well over 90% of all claims, and with most insurers typically over 95%.
I’ve no gripe with anyone exposing those instances where insurers treat claimants unfairly, but I can’t help thinking that those few who have great influence on consumers would be more helpful to their audiences if they paid more attention to the majority of outcomes and the pain they salve, rather focusing entirely on the tiny minority where we get it wrong.
Every institution gets it wrong from time to time. What’s different about protection is that it involves getting a very large amount of money at a time of grave vulnerability.
That makes it wise for consumers to be careful how you buy. Using a reputable adviser, preferably an independent one, will generally ensure you get good value for money in a competitive market, have your application properly completed, and perhaps most important of all make any claim assisted by an expert who is on your, the claimant’s side.
I don’t think the UK protection industry is fairly defined by its occasional failures; rather it has a very decent track record in helping families and individuals just when they need it most. So I think those who commentate or advice on personal finance are failing those that listen to them if they are not at least provoking the right questions.