The new frontline life cover payment should cause us all to stop and think.
The NHS announced a new life assurance scheme payable to the families of frontline NHS and social care workers, who die through contracting Covid-19 in the course of serving, reported as £60,000.
Where the main breadwinner has died, will this be enough for most families? Probably not – by any measure. Where there is full or part financial dependency on a deceased person, a sum equal to twice their pay is likely to deliver a sub-optimal financial safety net.
Putting it simply, if a family needed to generate £30,000 of income per annum, to replace the lost salary of an NHS worker, they would need savings of around £1,000,000 - assuming they took a conservative 3% level of income. Even if they decided that this replacement income was not needed throughout their whole lifetime, and they were happy to not keep the capital sum intact, in reality the £60,000 is still unlikely to be enough.
In the light of Covid-19 people are starting to think more about their own mortality, health and wellness. However, people have not taken the time to review how much cover they have; and almost certainly not tested whether this level is enough. It is important to ensure that you have enough cover, not some cover.
At SeventySeven Wealth Management, we talk to our clients about life insurance and ensure that these protection gap exposing conservations are held, in relation to both their personal and business affairs.
TIf you or anyone you know would be interested in a financial wellness conversation, please do not hesitate to contact us.