David was 40 when we first met, a professional working for one of the big restaurant chains. He initially came to see us about life assurance to cover his mortgage in the event of his death. He wanted to make sure his wife and daughters would be OK. The simplest thing to do would have been to find him the cheapest premium to cover his mortgage debt. Which we did. But then we really started to add value. Would they really be OK just because the mortgage was paid off?
David’s salary was crucial to maintain his family’s standard of living. Apart from the mortgage his family relied on his income to help pay for the essential things like water, gas & electric bills, food bills, petrol. With David (and his salary) gone, it would be difficult to see how his family could pay the essential bills and continue to enjoy the nicer things in life like holidays, eating out, children’s after school clubs, new shoes & clothes. He argued that his wife & daughters would view new shoes & clothes as essentials!
He realised a lump sum to pay off the mortgage alone was inadequate.
We also highlighted the “problem” if he didn’t die, but was seriously ill enough to be unable to work. His employer would pay him sick pay for 6 months but when that stopped it became clear that the family would seriously suffer financially & mentally. David didn’t like the idea of a 100% drop in salary, or living solely off statutory sick pay benefits – his Sky HDTV, and iPhone would be the first to go, we joked..….More seriously he didn’t want to contemplate how he would achieve any kind of quality of life, not to mention future events such as paying for his daughters potential future weddings if he couldn’t earn a living. He liked the idea of a replacement income, and a lump sum if he became ill.
So we asked David what his budget was and worked around him.
Thankfully David sleeps well at night now. We prioritised & addressed his biggest concerns and created an affordable policy which he pays into each month. It will make sure his family doesn’t face financial difficulties in his, or his salary’s absence.