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Don’t leave it too late!:

We were contacted by Matthew & Joanna to review their mortgage. Matt works as a cab driver and Jo works in a care home.

Having a mortgage, working and being parents, they both understood the reasons why they needed to take out Life insurance. The adviser who helped with the mortgage, also provided quotes at the time of the mortgage application. They decided they did not want to take this up at this time.

A few years later when we reviewed their mortgage, we asked about their life cover again. Life cover had quickly fallen off their to-do list as there were always other priorities, they decided to meet with the adviser again and go through their options.

The second discussion was again, around their life insurance needs and provided a set of solutions to protect their incomes in the event of sickness. As well as repaying their mortgage and leaving a lump sum for each other they also wanted to put some money aside for their son, Ryan.

Matthew had existing health conditions which resulted in an increased premium. The premiums were now, slightly higher than they were previously quoted and they needed more time to make a decision.

Before Matthew and his wife had made a decision, Matthew suffered a severe heart attack. He was hospitalised for some time with complications following heart surgery.

As a result of the surgery and recovery time, Matthew was unable to work, he was barely able to get out of bed.

When Joanna called up to enquire about a payment holiday on her mortgage, she explained what had happened. With their lives turned upside down for a while, she knew they had made a mistake in not taking out the life covers.

Joanna asked their extended family for help, they received emotional support and some financial support, but it was not enough. Matthew was receiving sick pay of £95.85 per week, which not enough to pay the mortgage and bills. They fell behind on their mortgage payments, bills, day to day expenses were all becoming a financial burden.

With the help of family, payment holidays and donations, they overcame some of the financial challenges. Matthew made a recovery and was able to start working.

The couple now wanted to put the covers in place as a prority; however, Matthew was no longer eligible for Income Protection or Critical Illness and life cover was also proving to be impossible due to the newly diagnosed heart condition.

Joanna put in place the covers we had recommended to provide an income, payout a lump sum if she suffered a severe illness and a lump sum to repay the mortgage and look after her family.

Having experienced real financial hardship for the first time in her life, she did not want to be in the same position again.

Fortunately, Matthew was able to recover but had that not been the case, the family could have lost their home, as well as suffering financial and emotional turmoil. All of which could have been avoided had they made protection a financial priority.

 Please note: that the case study is based on a real-life scenario, but names have been changed due to client confidentiality.

Published Dec 2020

It is important to take professional advice before making any decision relating to your personal finances. Information within this case study is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for information purposes only.