Why now is not the time to cancel protection policies

05/01/2023

The new year has arrived! January is a typical time to review your finances, and a good place to start is reviewing all the direct debits you don’t recognise or use. The likes of Netflix we could never imagine parting with, but insurance policies…are they essential? 

Today we are discussing the importance of insurance and why now is not the time to cancel your protection policies.

Can I cancel my protection policies?

To answer simply, yes. Although you do typically purchase a protection insurance policy to cover you and your family for many years to come, you are not tied to any of your protection policies should you decide they are no longer necessary.

Should you choose to cancel any of your policies though, you will lose the peace of mind that comes with being insured. We do not recommend making any hasty decisions with regard to cancelling insurance policies.

The importance of Life Insurance

Life Insurance is a policy designed to protect your loved ones by reducing the risk of financial troubles should you pass away during the policy term.

The decision to cancel Life Insurance may initially seem tempting to free up funds, plus you can always take out cover again in the future, right? Life Insurance is not actually that straightforward, however, as insurance is generally cheaper the younger you are. When you come to buy a policy again you might find the coverage is less affordable than it originally was due to ageing and potentially having increased health problems.

Why you should not cancel your Critical Illness Cover

Critical Illness Cover is in place to support you and your family financially should you be unable to work due to serious illness. Finances such as medical bills, your mortgage or anything else you deem necessary can be paid using a tax-free payout.

Not being covered by this Insurance may lead to financial hardships for you and your family should you fall ill and become unable to work. You don’t have to take this risk. You and your family can have financial security by taking out Critical Illness Cover.

Is Redundancy Cover Insurance necessary?

Should you involuntarily become redundant you will continue to receive payments if you have Redundancy Insurance in place.

You may not see this insurance as a priority when reviewing your finances. But without it, were you to become unemployed, you will be unable to seek cover. This means that you will not be eligible for financial support with your mortgage, loans or family. Therefore, making the decision to keep your Redundancy Insurance is a worthwhile choice.

Do I need Income Protection Insurance?

Income Protection Insurance is cover designed to provide regular payments to replace your income if you’re unable to work due to illness or an accident.

You may feel that Income Protection is not necessary due to your savings or a partner’s wages sufficiently covering your outgoings. However, you never know for how long this cover might be needed and your savings may eventually run out. In light of this, we strongly advise considering all factors before you make the decision to cancel Income Protection Insurance.

At B-advised we are here to help. We have a wealth of experience which allows our team to offer the most convenient access to financial advice across the UK. If you are struggling to cover the cost of your protection policies or are in need of a new policy, get in touch to speak to one of our financial advisers today.