How to provide a financial safety net for your family
Our clients usually come to us for a mortgage first, and once we’ve found the best one for their needs, it’s up to us to provide responsible advice to go with it. This is where ‘protection’ comes in. Protection is the catch-all word for products that exist to take care of you and your family’s finances if you become ill or die – like life insurance, critical illness cover and income protection (more on the different types further down).
Do you need protection?
A life insurance policy is not compulsory, but if you’re taking out a mortgage and have dependents, we recommend it. No matter how good a mortgage rate your broker finds you, a mortgage is a debt, and you don’t want anyone you love to be left behind with that debt. Being proactive about protection can help to minimise the financial impact of illness and death on a family.
Life insurance and critical illness cover usually pay a lump sum in the event of illness or death. We can help you work out how much cover you need, how long you need it for and what monthly payments you can realistically afford. As usual, you’ll get the best rates if you shop via a mortgage broker who has access to a huge range of products and providers – like we do. Going with your bank just because they happen to be your bank – or liaising directly with an insurer – is always more expensive.
What sort of thing does life insurance cover?
The protection you have in place should mean those left behind are able to make ends meet. They might use the money:
- To pay off outstanding mortgage debt
- For household bills and living expenses, including childcare and education
- To pay off other debts or loans
- To help with funeral costs
A good advisor will go through your circumstances in detail with you, considering things like your age and any medical issues. Feel free to give Pagoda a ring any time for free, no-obligation advice on anything protection-related.
What are the different types of protection?
- Life insurance
You pay a monthly premium for a policy term (i.e. 25 years), and if you die during the term, your beneficiaries receive a lump sum. If you’re a couple taking out a mortgage together, it may be worth considering a joint life insurance policy, but we can talk that through. - Critical illness cover
This is a common add-on to life insurance, but it can be taken out on its own, too. It’s designed to keep things ticking along financially if you can’t work because of illness. There are lots of different permutations and options, including things like children’s benefit and global treatment (which means if you get ill, you can access the latest treatments, wherever they are in the world) – and some illnesses are not covered, so it’s worth talking through this one with us in detail. - Family income benefit
This is a type of life insurance that – if you die during the policy term – pays a regular monthly amount to your family, rather than a lump sum. There are various scenarios where this could be useful – for providing ongoing support to young families, for instance. - Income protection
Income protection insurance pays you a regular income if you can’t work because of sickness or disability. It stops when you return to paid work. Or, if your injury or illness is so severe that you can’t return to paid work, it will pay out until the end of the policy term. A 2025 report by Aviva revealed that the average age of a customer when they made their first income protection claim was 42, which might be younger than you’d think. The most common reasons for people’s claims fell in the mental health and musculoskeletal categories.
What about the ads you’re getting on social media?
In recent years, specific insurers have targeted people, especially parents, on Instagram. It’s worth bearing in mind that this is a scary area to confront and some providers will capitalise on that, but you should never feel pushed into a policy. Using a mortgage broker, rather than contacting providers directly, is always the best way.
Still feeling overwhelmed?
We get it. There are few things in life more overwhelming than planning for the worst. Give us a ring on 01923 590 612 or drop us a line – let’s go through it all together.
*This blog contains information that was correct at the time of publication, but is subject to change.