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Hewison Private Wealth - Insights
Hewison Insights

The unsung hero of Financial Planning.

Marcus English
Insurance & Risk Adviser
18 Aug 2023

In the world of financial planning, the spotlight often shines brightest on strategies for wealth creation, investment prowess, and achieving financial milestones. While these aspects are undeniably crucial, an equally significant and often overlooked facet of a comprehensive financial plan is wealth protection. Just as a sturdy foundation supports the grandest of structures, insurance policies form the bedrock upon which successful financial futures are built.

Beyond Accumulation: The Importance of Wealth Protection

Wealth accumulation and investment strategies are the engines that drive financial growth and prosperity. However, these efforts can be rendered futile if not accompanied by a robust wealth protection strategy. Picture this: a diligent individual spends years saving and investing, steadily amassing a substantial nest egg. But then, life throws an unexpected curveball – an unforeseen medical emergency, an accident, or even the sudden loss of a breadwinner. Without proper protection, the hard-earned wealth could be decimated in an instant, jeopardising the achievement of cherished goals.

This is where wealth protection steps in as the unsung hero of financial planning. It acts as a safety net, shielding individuals and their families from the potentially catastrophic consequences of life’s uncertainties. By securing the right insurance policies, individuals can mitigate risks and preserve their financial well-being, ensuring that even when things go awry, their dreams and aspirations remain within reach.

The Pillars of Wealth Protection

Life Insurance: Life is unpredictable, and the premature loss of a family’s primary earner can shatter financial security. Life insurance serves as a lifeline, ensuring that loved ones are financially protected in the event of the unthinkable. It can cover outstanding debts, mortgage payments, ongoing income support, and educational expenses, offering peace of mind during difficult times.

Income Protection: Arguably among the most important aspects of wealth protection, income protection provides income replacement if an individual becomes unable to work due to illness or injury. This type of coverage prevents an unexpected disability from derailing financial plans and ensures a continued flow of income to sustain daily living expenses.

Total and Permanent Disability: Income protection covers a percentage of salary whilst unable to work, but what if it turns into a permanent condition? The reduced income might not be sufficient to service loans long-term or continue to live your desired lifestyle. TPD can provide a lump sum to bridge the gap you were working towards.

Trauma Insurance: suffering a critical illness can put significant strain on a family. Whether ceasing work to care for a partner or pay for out-of-pocket medical expenses and treatment over time, illness can quickly deplete financial resources. Trauma, or critical illness insurance, is there to supplement you financially as required during these times.

Health Insurance: A cornerstone of wealth protection, health insurance safeguards against exorbitant medical expenses in the private sector. Medical emergencies can strike at any time, and the costs associated with treatments, surgeries, or prolonged hospital stays can be financially crippling without proper coverage. A comprehensive health insurance policy not only preserves wealth but also provides access to quality healthcare without compromising financial stability.

Preserving Dreams, Ensuring Futures

While the allure of wealth creation and investment returns captivates many, it’s important to recognise that these efforts can be swiftly undone without proper wealth protection. Financial planning is a holistic endeavour that should encompass both aspirations and contingencies. By integrating wealth protection into their strategies, individuals can safeguard their dreams, shield their families from hardships, and empower themselves to navigate life’s uncertainties with confidence.

In conclusion, wealth protection stands as an essential pillar of financial planning, complementing the drive for wealth accumulation and investment success. A comprehensive approach to financial well-being involves acknowledging and addressing the risks that life presents. By securing appropriate insurance policies, individuals lay the foundation for a resilient and secure financial future, ensuring that setbacks are but temporary detours on the road to achieving their goals and dreams.