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REVIEWING YOUR RETIREMENT Do you still need life assurance or critical illness cover when you retire? Tees Financial’s senior wealth planner Cara Lambert discusses
R etirement is a good time to review your finances, including any life assurance and critical illness cover. The right level of protection will depend on your circumstances, your family and what you want your money to achieve. Cover that made sense when you were working may no longer be necessary. Equally, losing protection provided through your employer could leave an important gap in your financial plans. START BY REVIEWING THE COVER YOU ALREADY HAVE You might lose benefits that were provided through your employer or business when you stop working. This could include death in service benefits, private medical insurance or other forms of protection. Before retirement, it’s worth checking what cover you have, when it will end and whether you can continue any existing policies personally. You should also consider whether you still need the protection. Your circumstances may have changed considerably since you first took out the policy. DO YOU STILL NEED LIFE ASSURANCE? Life assurance generally pays a lump sum if and when you die during the policy’s term. It is therefore usually designed to protect the people who depend on you, rather than provide a benefit to you in your lifetime. The important question is: what would you want a lump sum paid on your death to achieve? For example, you might want to provide financial security for your spouse or children, cover funeral costs or provide funds to meet an inheritance tax liability. Your reasons for having life assurance may change when you retire. You may have built up sufficient savings and pension assets to provide for your family, meaning that you no longer need the same level of cover. On the other hand, if your family would face a financial shortfall without the policy, keeping some life assurance could still form an important part of your plans. WHAT ABOUT CRITICAL ILLNESS COVER? Critical illness cover is different, because it can provide a lump sum while you are still alive. Usually, this is paid upon diagnosis of
INSURING YOUR FUTURE Tees Financial can offer advice on the right life insurance cover for your needs
one of the illnesses specified in the policy, subject to its terms and conditions. Again, it’s worth asking yourself what you would want a payout to do. For example, you might use it to help pay for private medical treatment or make changes to your home, such as installing a stairlift. THINK CAREFULLY BEFORE CANCELLING EXISTING COVER It can be tempting to cancel insurance when you retire, particularly if you are looking to reduce your regular outgoings. However, getting new cover later in life can be more expensive. Existing medical conditions or other factors can affect whether you are able to obtain it, and some policies have maximum age limits, so consider the decision carefully. GET ADVICE ON YOUR SPECIFIC PROTECTION NEEDS There is no standard answer as to whether you will need life assurance or critical
illness cover when you retire. The right decision for you depends on your personal circumstances, your family and your wider financial plan. At Tees, our independent financial advisers work closely with our legal teams, giving you access to financial and legal expertise under one roof. We can review your existing protection alongside your pensions, investments and other assets, helping you understand the options available and whether your current arrangements still meet your needs.
If you are approaching retirement, arrange a review by contacting the Tees Wealth Planning team on 0808 303 8431
This material is for informational purposes only and does not constitute an offer or solicitation for the purchase or sale of any financial instrument. It is not intended as accounting, legal, tax or investment advice. Past performance is not indicative of future results, and all investments carry risks, including the potential loss of capital. Tees is a trading name of Tees Financial Limited, authorised and regulated by the Financial Conduct Authority (FCA), Registered number 211314, and registered in England and Wales (Company number 4342506).
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