The Sensible Bet

Friday 08 April 2016, 01:00 PM

Ricky Butler
Head of Best Practice , LifeSearch

  • Horse-Racing-Lg

The Grand National is one of Britain's most popular sporting occasions, with two-thirds of the country’s adult population likely to place a bet.  Those who bet on the National wager over £100 million every year to back a chosen horse. 

The savvy race goers will normally place their money on the favourite or the horse that is likely to do well on the day; the majority will go with gut instinct or leave it to chance in a sweepstake.  If you are sensible you place your money on the horse that has lower odds, not the one that has an outside chance of limping home.  

With financial protection it amazes me why so many people ignore the odds of the worst happening to them during their life, adopting the casino mentality of ‘it will never happen to me'.  We would rather back the unknown random lottery win of a lump sum of life cover than put our money into adequate planning for long term serious illness or loss of our income.  Dying isn't the biggest risk you face; instead it’s the real risk of becoming ill and living with the financial consequences of that illness.  

You can buy yourself time by backing that which is most likely to happen over your working lifetime; time to recover unfettered and without stress, time to make plans if your illness has long-term consequences, and time with your family when it is them you need the most. Without the financial stress of not being able to afford to live with an illness or injury.

Over the last thirty years life expectancy at birth for boys has increased 6.3 hours per day.  A male born in England and Wales can now expect to live to age 79.  However that same male has a 1 in 3 chance of suffering a critical illness in his working life and a 1 in 8 chance of cancer.  Prostate cancer is the most common cancer in all men, but medical advances mean that men are more likely to be diagnosed early and be treated more successfully than ever before. In fact 86% of men aged between 15–49 now survive for a minimum of 5 years according to Cancer Research UK.  We are living longer because of medical advances, but in turn the chances of becoming ill later in life increase exponentially.  Living with serious medical conditions that have an affect on our lifestyle rather than dying from them straight away is the reality, but many of us choose not to accept and plan for this.  

So why should you start planning now rather than tomorrow?  

•    Critical illness can strike at anytime. 19 was the age of the youngest person to claim on a Critical Illness insurance in 2012.  
•    The longer you delay arranging cover the more your premiums will be, and the more the likelihood an illness will afflict you. Affecting the cost of the cover, or indeed, that you will even be accepted by an insurer.  
•    You can fix your premiums for the duration of the term of the cover you arrange and the earlier you do this the cheaper your monthly outlay.
•    Protection is more affordable than you think. To provide a lump sum of £25,000 – a year’s salary for most - for a 37 year old man for Critical Illness would cost under £15 per month.  A good protection adviser can tailor make a plan to suit any budget.  
•    Think long term not just short term.  What would you do if you couldn’t work?  The bills wouldn’t stop just because you stopped working.      

People do not like to be reminded of their physical frailty, and would much rather focus on having exciting investments for their funds. But when serious illness or accident strikes, protection products come into their own and you should place your money on the event that is most likely to occur first; that’s the sensible bet.

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