At MyBump2Baby we are proud to work closely with financial advisors throughout the UK to help raise awareness on the importance of family protection. Today we have an expert article from Justin Fordham, our financial advisor in Norwich.
You always hear people talk about mortgage protection, but that is only half the equation when it comes to protecting your home and family.
This is especially true if you have a dependant adult, someone who is disabled, or if you have young dependent children.
The problem is not many people know what the other side of this equation is!
So let me take you on a quick journey…
We have a married couple with 2 kids. Dad earns a respectable £2000pm and mom looks after their 2 children, but also works part time and brings home another £500pm. So, the total income into the home is £2500, which is great.
Their monthly household budget.
•£750pm for their reasonable sized mortgage
•£1042pm on other general house expenses (Council tax / Elec / Gas food etc)
•£300 pm for child care etc (this is being conservative in most cases)
£2092 Total monthly outgoings
•£2500 income, minus £2092 outgoings = £408pm spare for savings and fun.
All looks good so far, right? …Or is it??
Scenario 1 – What if Mom unfortunately passes away?
•Dads’ income stays at £2000, but moms income disappears, so the total Income into the home is £2000pm
•Outgoings are £2092, but the mortgage has been cleared by a mortgage protection plan. So, this reduces the outgoings to £1342pm.
•£2000 income minus £1342 outgoings means dad still has a net income of £658pm. Still looking good?
•BUT, does dad now need extra child care given mom passed away? How much will that cost? Does dad need to give up work to look after kids? Does dad need to go part time? Will dad continue to earn enough to support the house? Does dad need to work more hours to support the house, but how does he do this with 2 dependent children?
Scenario 2 – What if Dad unfortunately passes away?
•Moms’ income stays at £500pm, but dads’ income is now Zero. So, the total Income into the home is only £500pm
•Outgoings are £2092, but the mortgage has been cleared by a mortgage protection plan. So this reduces the outgoings to £1342pm.
•£500 income minus £1342 outgoings means mom now has a negative budget of MINUS £-842.
•How does mom put food on the table? How does mom pay the running costs of the house now? Does mom need extra childcare so she can go to work full time to support the home? Does mom need to work more to support the house, but how does she do this with 2 kids?
When it comes to Family Insurance, most people are ill advised, and almost always under insured.
What people don’t realise is there are really affordable options out there, like a Family Income Benefit policy, that could easily prevent the dire consequences of examples above.
If these clients were both 30 years old, fit & healthy and non-smokers. In order to rectify this shortfall in their budgets, it would have only cost them around £11.00pm!
Don’t underestimate the value of professional advice when it comes to protecting your home and your family.
That little bit extra you might pay for the correct cover, could make the world of difference to those you leave behind!
If you wish to contact me for a no obligation chat, please feel free to do so via email: [email protected] or via phone on 0345 50 88 588 or 07813 255267.
About me and JF Financial Associates
My name is Justin Fordham – the mortgage and insurance expert at JF Financial Associates. South African born, but English by heritage. I have a lovely wife Joelle and two very crazy dogs that keep us out of mischief and very fit.
I have worked tirelessly over the years ensuring we only offer the highest quality advice, an exceptional service to every individual client and we have remained unwavering in our belief that each client should be treated as if they were a family member. There is only one type of advice provided at JF Financial Associates and that is “Honest advice every time!”
MEET JUSTIN ► Expert Mortgage Broker, Life Insurance & Family Protection Specialist, Golf Product Inventor & Entrepreneur. I’m a leading expert on Self-Employed mortgages & Complex cases. I love networking & I’m known as a Master Connector. The majority of my new clients come from recommendations from my very happy existing clients. Justin is our family protection specialist in Norwich. https://jffinancial.co.uk