Don't Get Spooked Out Over Your Finances This Halloween

The frightful season is upon us and the New Year is vastly approaching so it's important to get your finances in order and not let finance issues spook you out.

Protecting your income can be a scary issue to tackle but there are things you can do to minimise the negative experience.

Firstly look at your incomings and outgoings. Then ask yourself what you would do if you fell ill or were injured and as a result unable to work. Unfortunately, self-employed professionals do not have the financial backing of sick pay from an employer so how would you pay your bills?

Income protection insurance can be one way to protect yourself, and it's not as scary as you may think. Income protection insurance provides a regular tax-free income until you are well enough to return to work or retire.

And as your finances are vital to how you live your life, you'll be pleased to know it's not as expensive as you might think. What you pay completely depends on what you can afford and what you need. For example, cover for a 30 year old self-employed professional earning £30,000 a year and receiving a monthly income of £1,650 if unable to work, would cost just £37 a month.

Income protection claims can also be settled quickly and insurers may pay out from the first day of absence, providing you with help as soon as you need it.

But finding the right provider can seem like a daunting and frightening process.

Here are our top tips on how to find the right insurer:

1. Look at their claims rate. You need to make sure the company you choose will pay out your claim. Take a look at their claim pay out rates to see how often they pay out. A good insurer will pay over 90% of claims.


2. Do they give you extra? Mutual societies will give you extra by paying you a percentage of the profits once your contract has come to end which can be a handy little nest egg for the future.


3. What occupations do they cover? Look at their terms to make sure they cover your occupation. Also check out the illnesses and injuries they cover to make sure you will be protected for what you want.


4. Does the insurer meet your needs? Do you need an immediate income? If so, choose a policy that doesn't involve a deferment period.


5. Get independent advice. Gain independent information and advice from an Independent Financial Advisor or from companies who specialise in Income Protection. You can also find out more about Income Protection from consumer body Which? They have also recently updated their information on income protection to give consumers more in depth knowledge so it may be handy to take a look to help make your decision easier.

So this Halloween, don't get spooked out over your finances. Follow these steps to ensure a fright free winter.

David Thompson is CEO of dg mutual - income protection specialists who have been helping self-employed professionals to protect their income since 1927.

dg mutual paid out 99% of Income Protection claims for the fourth year running in 2011 and over 60% of claims within one week. As a Mutual Society, dg mutual has no shareholders but instead pays out a share of the profits to all members. http://www.dengen.co.uk/live/news/news.asp