“Hoping for the best, prepared for the worst, and unsurprised by anything inbetween.” Maya Angelou
We all imagine our retirement in the most positive terms – long holidays, a nice house somewhere quiet, taking up that hobby or pastime that we never had time for when we were working. We also have expectations as to when it might happen – perhaps earlier for some and later for others. But life rarely follows such a straightforward path, and when there’s a bump in the road, how well prepared you are for it will determine whether it’s an inconvenience or a major setback.
For Breast Cancer Awareness month in October 2021, Aviva released data on the claims it had paid out for 2020 with relation to that one condition – £63,464,230 to Critical Illness customers (average payment £77,000) and £1,370,939 to individual income protection customers (average £20,000 annual benefits).
Breast Cancer was by far the most common reason for claim among women, accounting for 42% of all Critical Illness claims. Moreover, the average age of a claimant was just 46 – even were you planning to retire around 65, this would still be a problem that might occur twenty years prior, which could cause significant issues to your plans.
Of course, nobody wants to think that they’ll fall ill with cancer or any other critical illness, but proper financial planning means taking account of the bad possibilities as well as the good ones. A critical illness diagnosis – even one like Breast Cancer with a high survival rate on early diagnosis – can leave you unable to work for long periods if not indefinitely. It can impact not just the theory of your retirement plans in terms of age and outlook, but the concrete means of getting to them by impacting your ability to work. For this reason alone, any thoroughly mapped out retirement plans should always include a proper amount of critical illness cover.
A basic CiC plan can provide a lump sum which may pay for treatment, cover lost income in the short term and ensure that other arrangements like investments do not suffer. Moreover, an Individual Income Protection plan can ensure that in the unfortunate case of a long-term critical illness, your inability to work doesn’t mean a sudden cessation of income to the household, which can be vital in assisting you to reach your retirement goals regardless.
Like anything relating to retirement planning, an early start is a good start – most critical illness cover will only get more expensive with each passing year, and the savings that you can make by taking such policies out at a younger age cannot be overstated – as you get older and the chances of you making a claim increase, so too do the premiums. By taking out cover when you are younger and healthier – which many may erroneously see as a waste – it’s possible you may enjoy lower premiums, which will be of great benefit to you over time. And while we are considering worst case scenarios, although the average age for women claiming for Breast Cancer was 46, the youngest claimant in Aviva’s data was 27.
The point of insurance isn’t to scare a client or to rack up more expense, but to ensure that they have all the possibilities covered. Surprises are a bad thing when it comes to retirement planning, and whereas we can’t aspire to eliminate them entirely, we can certainly ensure that their impact on your plans is minimised.
–Seymour Financial–
