5 life events that mean it is time to check your protection

Getting a mortgage is a big moment, whether it is your first home or a bigger one for the family.

It is also the biggest financial commitment most of us make, and over 25 years or more, life rarely stands still.

The part that often gets left until later

We see this a lot. People put real time and energy into finding the right mortgage. Then the protection side, the cover that could help keep up the payments if something happened to them, gets put on the “we’ll sort that later” list. And later does not always come.

If that sounds familiar, you are not alone. Research by the Financial Conduct Authority¹ found that 58% of adults do not hold any protection, such as life insurance, critical illness cover or income protection. Of those, 59% had never even thought about what they might need.

Not everyone needs every type of cover. What you need depends on your family, income, savings and any benefits you already have. But it is worth checking.

Here are five life events that are a good prompt to do just that:

1. You have moved house or borrowed more
2. Your family is growing
3. You have changed jobs, gone self-employed or left the Forces
4. You have got married, entered a civil partnership or separated
5. Your health or lifestyle has improved

We explain each one below, plus a few bonus reasons.

1. You have moved house or borrowed more

If you have moved, or borrowed more for an extension, your mortgage is probably larger than it was.

What to check: If your life insurance was set up for your old, smaller mortgage, it may no longer be enough to pay off what you owe today.² Check it still runs for as long as your mortgage does.

2. Your family is growing

Congratulations if you have a new baby, adopting or becoming a step-parent but this does mean more people are relying on you.

What to check: Cover that only pays off the mortgage will not help with everyday living costs. Some people choose to add family income benefit, which pays a regular monthly income rather than one lump sum, or critical illness cover, which pays out if you are diagnosed with a serious illness covered by the policy.

3. You have changed jobs, gone self-employed or left the Armed Forces

Some employers offer “death in service” cover, which pays out a sum linked to your salary. But that cover ends when you leave that job.²

If you are self-employed, there is no sick pay to fall back on.³

Leaving the Armed Forces? The benefits linked to your service will change too. GOV.UK has guidance on armed forces pensions and what you may be entitled to.⁴

What to check: Whether you still have life cover in place, and how you would keep up your mortgage payments if you could not work. Insurers vary on the level of income protection they pay but typically you will say policies that pay between 50% and 65% of your income if illness or injury stops you working.³

4. You have got married, entered a civil partnership or separated

Each of these changes your legal and financial ties to one another, whatever your family looks like.

What to check: Whether your policy is still set up the right way, and who it would pay out to. It may also be worth writing your policy in trust. A trust could mean the money is paid out without waiting for probate, and it may not count towards your estate for Inheritance Tax.² Trusts could be complicated, so it is worth getting the right advice. 

Please remember we do not offer tax or legal advice. 

5. Your health or lifestyle has improved

Not every review is about adding cover. Some could help you save money.

If you have stopped smoking or vaping, many insurers will treat you as a non-smoker after a defined period of time without nicotine. Smoking is one of the things that affects how much you pay.²

What to check: Whether a new quote could cost less. You will be older now, though, which could push the price up. Never cancel an existing policy until any new cover is in place.

Bonus: a few reasons you might not have thought of

• Your salary has gone up. If your cover was based on what you earned a few years ago, it may not match the life you have now.
• Your partner has stopped working or cut their hours. Their role still matters, and it could cost a lot to replace if something happened to them.
• Your mortgage deal is coming to an end. You are already looking at your finances, so it is a natural time to check your cover too.
• Your children have grown up. You may need less cover than before, which could mean paying less.
• Your policy is due to end. Especially if your mortgage now runs for longer than your cover.

Is your protection keeping up with your home?

If any of these things have happened since you last looked at your cover, it could be time for a check.

If we arranged your mortgage but you have not looked at protection yet, or it has been a few years since you did, we would love to have that conversation. There is no pressure. Sometimes the answer is that nothing needs to change, but that is also good to know.  If we didn’t arrange your mortgage but you would like us to look at your protection, we can do that – you don’t have to be an existing client to be supported by our Protection Team.

We have 2 protection advisors here at Yes Mortgage Services, Kelly and Amanda – either of them would be delighted to talk to you about Protection and your personal situation.