Wednesday 3rd of March 2010
You could be putting your family in financial jeopardy by not having insurance in place to protect them should an unexpected event occur, a situation an individual voluntary arrangement (IVA) could resolve.
If your unsecured debts top the £15,000 mark and continue to climb then critical illness and other life insurance policies may seem like expenditure that you cannot afford to cover.
New research for Friends Provident shows that almost half of people in the UK do not have such insurance policies in place.
But if you or your partner dies or becomes critical ill, this could leave your loved ones with no financial protection from a loss of household income, bills, debt repayments and other everyday costs.
You may, therefore, want to get some answers on IVAs to see how they could strengthen your finances for the long term.
IVAs can freeze the interest on your unsecured debts, making repayments easier to meet. If you manage to chip away at enough debt you could find some of your income is left over to put towards an insurance policy.
Making sure your family is provided for could give you peace of mind, as could eventually being debt free.
The survey reveals that a third of you believe that, if you were unable to work because of an injury or illness, you could live on less than 35 per cent of your take-home pay.
Once your unsecured debt commitments are all met, this could leave very little for your other expenses, or treats for your family.
Commenting on the findings, Ed Stuart-Brown, head of protection sales at Friends Provident, says: "It’s a sad fact of life that the unthinkable can and does happen and the last thing you would want is to leave yourself or your family in dire financial straits."
Reducing your borrowings through an IVA now could mean that in around five years’ time you are in a financially stable position and better able to cope with life’s unexpected events.
By Neil Burton
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