ProtectionOct 20 2016

Protection is an essential part of saving for children

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      Protection is an essential part of saving for children

      Clients saving for their children's education will also need to know how protect the income that creates the savings they have made to raise and support their offspring.

      Protection cover is often ignored, to the detriment of clients who may suddenly become unemployed or suffer a critical illness that results in a long-term loss of income to the household.

      According to LV='s Cost of a Child report, 59 per cent of parents are already struggling to manage their outgoings - and 49 per cent do not have a plan in place for a sudden loss of income, regardless of any savings they may have made.

      No parent has ever wanted their child to further suffer the disruption of having to leave private school at a time when they most need stability Robin Baker

      Emma Thomson, head of customer care at LifeSearch, comments: "It is very important for people to look at how they would maintain their standard of living if they are unable to care for their family, so they can ensure they are not leaving themselves at risk financially."

      Keeping them at school

      Alan Lakey, adviser for Hertfordshire-based Highclere Financial Services and founder of CI Expert, says: "Having children is an appropriate time to consider a protection strategy.

      "Protecting the family means ensuring the continuation of income on premature death and during periods of ill health.

      "Specific family protection plans exist, such as family income benefit, to replace the income of the deceased parent, and special income protection plans are available for house persons."

      The infographic, below, from LV='s Cost of a Child report highlights how serious the need is for proper financial planning and protecting the family income.

      According to Robin Baker, adviser for Eden School Fees Planning: "It is crucial to protect school fees from death or incapacity. Many parents fund school fees from income and while we can help them work out a better way to pay their school fees, we will always recommend protection.

      "No parent has ever wanted their child to further suffer the disruption of having to leave private school at a time when they most need stability. Life and income protection provides a safety net to ensure no matter what happens, the impact on the child's education will be reduced."

      Meeting the school and university fees is just one thing on the list to protect - keeping up payments on the family home is also something that needs to be considered.

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