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PERSONAL PROTECTION
PERSONAL PROTECTION
Protecting you and your family.
Although we regularly insure everything from our home to our pets without even thinking, we often neglect to protect the most important thing of all - ourselves and our families.
Unexpected Illness, injury or premature death can create significant financial stress during already emotionally tough times. Having the right protection plan in place can ensure that these times don't have to be followed by the additional stress of having no money to pay the bills.
There are a broad range of protection products available, so with the right advice, you can ensure that, when you can no longer work, your income or your family can still have the finances needed.
FAMILY PROTECTION
Protecting your family's financial security
Family protection is a type of life insurance that gives you the peace of mind that should the worst happen, your family's financial security will be taken of.
It pays out a lump sum or a regular income on death that could, for example, clear a mortgage, a debt, or cover day-to-day expenses.
Term insurance is the simplest and often the cheapest because it pays out only if you die within the defined term. For example, you might take out a 30 year plan so the policy would only pay out if you were to die in the next 30 years.
Thinking about how much money your family would need to maintain their lifestyle if you weren't around can give you a good idea of how much life insurance you need.
Whether you're a young couple building for the future or a family with children that are going to rely on you financially for many years to come family protection is a must
MORTGAGE PROTECTION
Protecting your home and family
Your mortgage is probably your biggest monthly out-going but if the worst was to happen or if you was unable to work due to ill health you or your family could be at risk of losing your home.
The are three types of policy that can be used to protect your mortgage payments:
Life Insurance -
There are a number of ways to write life insurance policies so that your mortgage is protected, the most common being a decreasing, fixed term life policy that essentially tracks your outstanding mortgage so, should you die, it can be paid in full.
Critical Illness Cover -
Similar to life insurance in that it pays a lump sum benefit should you get a critical illness. You may decide to cover the full amount of the mortgage or a smaller amount so you can pay the mortgage whilst you recover and are unable to work
Income Protection -
Can be used to provide a monthly benefit should you be unable to work due to ill health, injury or even because you've been made redundant.
CRITICAL ILLNESS COVER
Protect you and your family from the financial impact of falling ill
A serious illness can have serious and life-changing effects. Critical illness insurance could help relieve the financial pressures if you are unable to work and give your family peace of mind.
Critical illness cover gives you financial protection against certain illnesses and medical conditions of a certain severity. Your cover will provide you with a tax-free one-off cash payment which can be used to help you and your family. It only pays out once and then the policy ends.
This can help pay for your mortgage, rent, debts, or alterations to your home, such as wheelchair access, should you need it.
The definition of a critical illness varies between insurance companies but examples of critical illnesses that might be covered include:
- stroke
- heart attack
- certain types and stages of cancer
- conditions such as multiple sclerosis
Some policies will make a smaller payment for less severe conditions, or if one of your children has one of the specified conditions.
INCOME PROTECTION
Protecting your monthly income during prolonged periods of ill health
Income Protection provides a monthly, tax-free benefit, should you be unable to work due to ill health or injury – effectively enabling you to provide your own sick pay.
The maximum monthly benefit allowable is generally set at around 60% of your salary (plus dividends if you are a business owner). There is a broad choice of policies available, which vary greatly in how they cover you and therefore how they are priced, so it’s critical you take advice before purchasing one.
There are also a number of key decisions you need to make including how soon the benefit will start being paid to you once you’ve been signed off sick (the deferred period), as well as how long it will pay for any one continuous episode of ill health (the benefit period).
Income Protection is available to business owners, the self-employed or those working for someone else and covers nearly all occupations. It is however a more complicated product compared to critical illness cover, so getting good advice, so that you get the right policy for you and your circumstances, is vital.
Income Protection can offer the most robust financial protection for you and your family if you become unable to work due to ill-health or injury. Whether you would struggle financially within a few days of being unable to work, or whether your main concern is the consequence of much longer ill health, Income Protection can provide the cover you need.
PRIVATE HEALTH INSURANCE
Ensuring you, and your family, have access to the best health care
Health insurance is a great way to safeguard the health of you and your family should you become ill and need treatment. It provides protection for the whole family allowing you to bypass lengthy NHS waiting times and receive appointments and treatments quickly.
Policies for families needn't be expensive, and you can choose the level of cover you require to help manage your budget. With most private medical insurance policies, families pay a monthly premium and the policy will then pay out, up to specified cover limits, for any treatment that might be needed.
You will also have access to a wider range of resources. Private hospitals offer a large selection of treatments from the most basic to the more specialised, and can give you ongoing recovery treatments such as physiotherapy, many of which may not be readily available when relying on the NHS. In some cases you may be able to get treatment that is not available on the NHS at all because it is too expensive or not approved in NHS hospitals.
As well as receiving care much sooner private health care also means more choice and more privacy. You can choose your own hospital, your own doctor, and you get your own private room.
GIFT INTER VIVOS PLAN
Protecting family members from the cost of Inheritance Tax
If you plan to gift significant assets to family members, other than your spouse, there is a risk that, should you die, you’ll leave behind a large Inheritance Tax bill for those you’ve given the gift to. This can be difficult for them to pay, especially if the asset is something tangible like a home.
These gifts can be liable for inheritance tax for seven years, which is why Gift Inter Vivos plans run for seven years and the amount of cover goes down each year, after the third year, in line with the liability. Gift Inter Vivos plans provide a lump sum pay-out on death, matching the liability on a Potentially Exempt Transfer (PET) that is over the nil rate band for inheritance tax.
It's strongly recommend that the policy should be placed into trust. This will ensure that the benefits from a claim on the policy are not added into your client’s estate, which would actually increase the liability. It also means the policy does not get caught up in probate so can be paid to the beneficiaries quickly in order to pay the liability as soon as possible.