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Nobody in their twenties wants to think about dying or becoming ill. However, this is a crucial part of financial planning that can bring huge relief during worrying times (and it’s more cost effective to sign up for life and critical illness cover at a younger age).

What exactly is life and critical illness cover? It’s a policy that will pay out a lump sum if you are diagnosed with a serious health condition (each policy will have its own terms and conditions so it’s key that you find the right one for you). If you die within the duration of the policy, it will pay out to your next of kin.

Changing circumstances

Many of my peers (35, and younger) have been conditioned to sign up for monthly subscriptions (Netflix, Amazon, gym memberships, online apps, mobile phones), but don’t have any liquid assets they can rely on if they become seriously unwell. It’s easy to pay £50 per month for the latest iPhone, but what about prioritising financial security for you and your family?

If you’re in your twenties or thirties, this is often the time when you buy a house, get married or choose to live with a partner. You might have children, which means you also have a family that depends entirely (or in part) on your income. It is vital that you have measures in place to protect you financially if anything were to happen.

Three reasons to consider cover

There are three primary reasons you might want to consider investing in life and critical illness cover when you’re younger. These are:

  1. If you have significant financial commitments (potentially paying a mortgage or rent, utility bills, etc.) and you become ill, how will you cope?
  2. If you are diagnosed with an illness (or worse), there is already a huge emotional strain on you and your family; you can avoid adding financial concerns to the list if you have adequate cover.
  3. The younger you are, the more cost effective the premium (the older you are, the higher the premium). Many policies include a locked-in monthly fee, so there are greater benefits to signing up at a younger age.

It won’t happen to me

You might have heard of, or lost, someone dear who was shocked to be diagnosed with a serious illness while they were in their twenties. Nobody wants to believe that it could happen to them; however, you don’t want to be the person who has a heart attack and no financial security to fall back on.

Of course, the younger you are, the less risk there is of you developing one of these illnesses, but that’s why it’s more cost effective to commit to a policy at a younger age. You have to decide whether the monthly cost of the policy is worth it, or if you (or your family) would prefer to take the risk and face the financial challenges that may arise if you become ill (or die).

Cost doesn’t need to be a barrier

Life and critical illness cover needs to offer the right level of protection based on your lifestyle and financial commitments.

The average couple in their twenties with a mortgage of £250,000 could secure a policy in the region of £110 per month (subject to underwriting). For many couples this is affordable, and if you have a heart attack or a stroke, you’d then have the money to pay your mortgage off (terms and conditions apply).

Cheaper policies are available (£10–£20 per month), but these offer lower payouts, so it’s important to seek professional advice before committing to any policy.

Product range

Here at Applewood Independent we can access every life and critical illness product on the market. Every product will include a payout to your family if you die, but each one will have different lists of critical illnesses that they include or exclude. It’s important that we find the best product on the market to suit your personal circumstances.

We all have busy lives, but finding out more about life and critical illness cover needs to be a priority, not least because the cost of your monthly payment increases as you get older. Email to book an appointment or to find out more.

The views expressed in this article are those of the author and do not constitute financial advice. Applewood Independent Ltd is authorised and regulated by the Financial Conduct Authority. For financial advice designed for you and your specific circumstances, please contact the author using the contact details provided in this article or, alternatively, contact the Applewood Independent Ltd office on 01270 626555.

The value of your investment can go down as well as up, and you may not get back the full amount invested.

Past performance is not a guide to future performance.