A Midlands accountancy firm says the COVID-19 pandemic tragically making the loss of loved ones a kitchen table discussion is a timely reminder of the importance of having financial protection in place.

Prime Accountants Group says the pandemic has taught us a number of valuable lessons – one of which is how financially vulnerable we can be when life changes quickly.

Prime, which has offices in Solihull, Birmingham and Coventry, is encouraging people to not just focus on growing wealth but also to protect themselves financially from unforeseen circumstances with the right insurance.

Glen Callow, managing director of Prime Wealth – the financial planning arm of Prime Accountants Group – said there were a range of insurances and protections available which can help cover individuals and families, but emphasised the need to sign up for the right scheme to protect against life-changing circumstances.

Glen said: “It’s a given to insure a car, as we most likely would not want to live without it. But more often than not, we don’t give the same level of importance to insuring ourselves or families when the impact is likely so much greater.

“It’s the role of financial advisers like myself to educate clients through the ‘what if’ scenarios and help them understand the financial consequences in the unexpected event of death or long-term illness.”

Commenting on the insurance policies available, Glen added: “It is understandable that premiums increase with age. Most policies get more expensive each year but this accelerates from the age of 45.

“For example, a 20-year-old applying for a life cover sum to the age of 65 would pay a significantly lower monthly premium than a 45-year-old for the same sum, which can be off-putting to some. Delaying can lead to a discovered health issue making the plan either unaffordable or in some instances not possible.

“However, we must not let this factor stop us from securing insurance as even a small amount of cover at an affordable level is much better than none. Lower value polices that could provide vital funds should always be considered to cover at least some liabilities or outgoings.”

He added: “Typically, our younger, successful clients take on more and more debt over time with mortgages on their larger houses for example, until they reach their late 40s or 50s and earning capacity increases and they are able to reduce it.

“It is during these years that insurance is so important to cover the loss of earnings, debt repayments and to provide for children in the event of a lost parent or parents.

“There is a level of knowledge and experience that is needed when providing the right protection advice to clients today. The insurance salesman has been demonised in some ways in the media but the right advisor can play a vital role protecting people from bumps in the road.

“The advice gap created by the banning of funded commissions on pension and invested products shows that otherwise well-intentioned regulations can have poor consumer outcomes and it is something we as an industry need to tackle together today.

“There are plenty of ways to buy insurance online but these come without any obligations for the provider to ensure the product is suitable.  That requires conversation and a full understanding of the person’s present and future needs and this isn’t a five-minute job.

“Buying online can be slightly cheaper in some cases but in our opinion saving a few pennies and getting the wrong type of policy is a far worse outcome than a slightly more expensive contract.

“Furthermore, if the policy isn’t arranged in a suitable trust there could be poor taxation outcomes and the policy proceeds may never reach those intended to benefit” Glen concluded.