As I recently discovered, the unexpected can happen at any time.
After waking up in the middle of the night, I headed to the bathroom. However, on my way back to the comfort of my bed, I lost my footing and fell, cutting my head on the corner of a cabinet. Although only a minor accident, I ended up having my wound tended to in A&E.
While an unpleasant experience and one my wound and plasters reminded me of for days afterwards, I was fortunate to get away with minor injuries. A slightly different angle or a few steps either way and the results could have been much worse.
Accidents like these highlight the importance of having plans in place to protect you and your loved ones in case the worst should happen.
In fact, knowing you’ve organised your affairs before it’s too late can mean greater peace of mind for you and your family.
So, read on to find out what my nighttime fall can teach you about the importance of organising your finances now.
An accident or illness could keep you off work and affect your earnings
As my nighttime fall proves, the unexpected can happen at any time. If you’d had an accident yesterday, it’s important that you have plans in place to ensure you continue to receive an income should you be unable to work.
Without this safety net, you may struggle to keep on top of essential outgoings, such as your mortgage payments and bills.
Having an emergency fund that you can dip into in this situation can help you maintain your commitments in the short term without having to rely on expensive credit or go into arrears. I’d normally suggest somewhere between 6 and 12 months expenses would be appropriate.
Alternatively, income protection can provide regular payments that replace part of your income if you’re unable to work due to an accident or illness. Typically, this is between 50% and 65% of your usual income and if arranged on a personal basis, it’s tax-free.
Having the safety net of a regular income could provide you and your loved ones with the confidence of knowing you can continue to afford your regular outgoings – whatever happens.
Accidents highlight the need for life insurance
While my accident was minor, it could very easily have been different. Not only does it highlight how things can change in an instant, but also how important it is to have the correct protection in place.
For example, if you’re diagnosed with a serious illness, you may have to take an extended period off work or adapt your home. And, if the very worst happens, could your family maintain their lifestyle without your income?
In these scenarios, protection can provide an injection of financial support when you and your loved ones most need it. And, as my fall could have highlighted, putting it off could end up meaning it’s too late.
Working with a financial planner can help you identify the most suitable protection and how you can incorporate this into your financial plan.
Organising a Lasting Power of Attorney can provide you with peace of mind
While we all like to plan for the future, none of us know what’s truly ahead. Indeed, my recent fall and trip to A&E highlights the need to have a trusted person lined up to make decisions for you if you can’t.
In fact, the rather large plaster on my forehead recently served as a wake-up call for a client, who had been debating whether they needed to put a Lasting Power of Attorney (LPA) in place.
If they were to have a similar fall but be slightly less fortunate and end up unconscious in hospital, their loved ones wouldn’t necessarily have been able to make important decisions on their behalf without an LPA in place.
Allowing you to appoint one or more people, known as “attorneys”, to make decisions on your behalf or help you make decisions means you’ll have more control over what happens to you in the future.
Without one, your loved ones may be locked out of your financial affairs, as your spouse or partner may not automatically be able to gain access to your bank accounts, insurance, or investments.
My story was the extra push my client needed to sort his LPA straight away.
Having a valid will in place is crucial
If the worst had happened yesterday, it’s important you know your money, property, investments, and possessions would all go to the people and causes you care about.
Having a valid will in place makes provisions for your loved ones and can help to avoid future family arguments over “who should get what”.
Additionally, having a will in place could reduce stress for your family during a challenging time.
However, despite the important emotional and financial benefits of having a valid will, research from Canada Life revealed that 1 in 2 UK adults don’t have a will in 2023.
So, if you don’t currently have a will in place, let my accident serve as a reminder to set one up before it’s too late.
Get in touch
If you’re looking to safeguard your family’s future in case the worst should happen, speak with Solus Financial Planning today.
We will help you identify where you have a shortfall in protection or estate planning policies and organise your finances so that you can protect your loved ones financially should you have an accident.
Email firstname.lastname@example.org or call us on 01245 984546.
Note that protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
Solus Financial Planning is not responsible for the accuracy of the information contained within linked sites.