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Protection points

With the Budget out of the way and spring rolling round, a new tax year is upon us and talk of tax, tax forms, tax breaks – the list goes on – fills the money section newspaper columns.

These tax-related articles are interspersed with ads for Isas, Isa recommendations and Isa best-buy tables.

Spring, it would appear, is not only the time to clean homes, move house and generally clear out the clutter. Now more than ever, with an increasing choice of investments, it would seem that it is also the time to springclean your finances. Deciding where to invest and in what is becoming almost as important as filing our tax returns. What is interesting to note is that while we are happy to use springtime as a springboard for sorting out very specific financial matters, we do not tend to use it as an opportunity to look more broadly at the policies we hold (or hide in files and desk drawers, as the case may be).

Here we are thinking about taxes and which Isa to choose but what about investing in ourselves? What is the use in all these financial investments if we cannot enjoy them?

What if we were to get sick and had to use these investments to pay for treatment and to support us when we were off work? Are we protecting ourselves properly? After all, surely the most sound financial investment is the one that we make in ourselves?

In fairness, as consumers, not many of us think about our protection policies much after we buy them, not least because the purchase tends to accompany a mortgage or another similarly crucial event in our lives. However, it is important to remember that just like modifications and improvements to Isas from one tax year to the next, for example, protection products also evolve, becoming increasingly competitive and attractive for consumers.

We should be looking at our finances across the board, investing in cash and equity but in ourselves as well.

We like getting a good return on our financial investments, be it in the form of tax breaks or high rates of interest, and we should also get a good return on any investment we make in ourselves. What consumers like are tangible benefits such as Airmiles or points collected on loyalty cards.

This is possible now with health and protection products. Some providers now work on a points’ system. The idea is that policyholders are able to lower their premiums the more points they accumulate. Points are earned by making the effort to look after their health and wellbeing by participating in healthy activities such as going to the gym, attending a health screen and downloading healthy meal plans. So, not only are policyholders investing in their physical health, they are also potentially being rewarded financially with lower premiums.

But it is not just the way that policyholders can interact with protection products that has changed. Cover has also extended to include more illnesses and reflect changes in medical advances and the type and nature of illnesses we are more susceptible to in today’s society.

Rather than the traditional critical illness all-or-nothing approach to insurance, payouts are linked to the severity of the illness and the financial detriment that could result. There is the facility for multiple claims if the need arises and the opportunity for payments that are proportionate to the severity of the illness but also continuous, meaning customers could be able to claim more than once throughout their policy term.

These significant improvements make protection products indispensable, viable and, most importantly, relevant on a daily basis.

A reassessment of protection policies may be long overdue and could prove to be the most important decision you make for clients and their family for the coming year. After all, a lot can change in a year.

Sammy Rubin is CEO of PruProtect

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