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April 05 newsletter - Editor’s Note – the Shape of Money stopped providing financial advice in April 07

In this month's newsletter, we're pleased to launch a life insurance calculator.

It's rare for the Shape of Money to complete a comprehensive insurance needs analysis only to discover that a client is fully insured.

Life insurance, in our opinion, is vital if you have dependants. While, at the other extreme, if a client doesn't have dependants, it's rare that we do recommend life insurance. There are generally more important claims on insurance premiums, for example income protection insurance.

The calculator gives you the opportunity to assess the financial impact of the death of you or your partner.

The next step is to investigate the cost of extra life insurance premiums. Not many of our clients have extra money left over each week, just waiting to be direct credited to an insurance company.

For those under 40, life insurance can be relatively inexpensive for the security that the cover can provide. Obviously, as you get older, life insurance becomes more expensive and you're more likely to be suffering from a pre-existing condition which can also increase premiums.

Understanding the required level of life insurance cover gives you three options. The first and ideal option is that you purchase the recommended level of cover.

However, what the Shape of Money does with a number of clients who, for various reasons, are unable to purchase the required level of cover, is to help them develop the second and third options. These options look at what can be done to mitigate the financial effects of premature death.

In the first instance, it might be that the client makes changes to their lifestyle, such as reducing weight or giving up smoking. In the second instance, it can be the development of an emergency budget that both partners agree on and which can be implemented in the event that the household income suddenly falls.

the Shape of Money strongly recommends that your life insurance requirements are reviewed at least every two years. As the kids get older, for example, the need for cover reduces. This is useful because, as you get older, the cost of cover increases. While most of our clients are underinsured, we certainly don't want them be over insured and paying unnecessary premiums.

Please do not hesitate to contact the Shape of Money for a free meeting to discuss your requirements. Find out whether the Shape of Money's independent and personal approach might be right for you.

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