LIFE ASSURANCE

Sadly, many families will experience the trauma associated with the death or a serious illness of a loved one who is one of the main income earners. Whilst we try not to think about such things, it is extremely prudent to give serious thought to insurance cover for the main family earners just in case the unforeseeable happens.

With some insurance companies it is also possible to add on optional extras such as critical illness cover. The plan will pay out on either death or on the diagnosis of a qualifying critical illness or if you die within the stated term.

A term assurance policy is designed for people that wish to leave a lump sum in the event of their death within a specified term. It will keep their cost to a minimum. Term assurance protects families from the financial problems that could arise from a personal tragedy. It is particularly important if you have young children or dependents. Term assurance can be used to cover a mortgage or other loan so that your family would be protected against having to repay a debt should an income earner pass away. The most common policy to protect a mortgage is Decreasing Term Assurance. This means that the sum assured reduces each year roughly in line with the capital being repaid to the mortgage company which makes it the cheapest form of life assurance you can take.

CRITICAL ILLNESS COVER (CIC)

Critical illness cover will pay out on the diagnosis of a specified illness. This option is very often added to a life assurance plan but it can also be taken out purely on its own. They are for people who would like to receive a lump sum if they are diagnosed with one of these specified illnesses. It could be so that the mortgage would be paid off or other loans or even to pay for time off work. The lump sum could even be used to pay for any necessary alterations that would need to be made to the home to be able to adapt to the problems that a critical illness could bring.

The quality of cover and the illnesses which are covered vary from one provider to another so it would be prudent for you to use an advisor like us to find the right plan at the right cost for you.

INCOME PROTECTION

An income protection plan is exactly what it says it is. They are designed to pay you a regular income if you are unable to work due to accident or illness. These plans will continue to pay you an income as long as you are unable to work up until a specific term of the policy which is normally your nominated retirement date.

Very often these plans are seen as the hub of financial planning as it is always likely that other plans would have to stop if not enough income was being received in the household.

They are for anyone who is working whether they are employed or self-employed. Something that should be pointed out is that although your employer provides you with sick pay, it is usual that it would only be for a limited time and therefore ongoing protection is important. Plans can be fitted in with any existing arrangements that you may already have in place and as advisors we can help in finding the plan that suits your needs and budget.

ASU (Accident Sickness and Unemployment)

Accident sickness and unemployment insurance is the only type of insurance policy that will cover if you lose your income due to redundancy. In the current economic climate we have seen that no job is certain but knowing that your household bills would be paid if redundancy were to happen would surely be a great relief in that respect. It would mean that the family’s welfare and lifestyle can be maintained due to job cuts or even illness. The stress would be far less to cope with.

ASU insurance is a time limited insurance policy that will provide you with short term assistance in paying your debts should you be unable to work temporarily.

The cover normally starts paying out one month after you’ve stopped working and will continue for either 12 or 24 months depending on the policy and company that you have chosen.

When considering ASU insurance it is very important that you read the small print as there is a great deal of difference between the available policies and providers in what is and isn’t covered. You need to check carefully if you have ever had a particular health issue previously and making sure that this would not be excluded.

WHOLE OF LIFE

This kind of policy will pay out whenever you die and not just within a given term. More often than not, it is more expensive than a term policy simply due to the fact that the life company knows should all premiums be paid it will definitely have to pay out whenever death occurs.Quite a few of these plans offer some form of investment element to the plan which makes them more flexible than term assurance and can also acquire cash values to them.They are designed specifically for people who would like to leave a lump sum upon death whenever that occurs. They can be used to pay off debts that will not be repaid during your lifetime and to leave a particular sum so that it can be used for an Inheritance Tax liability.

Call us today on 020 3002 0933 to find out more.

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Copyright Finance 4 Homes Limited 2018

Finance 4 Homes Limited is an Appointed Representative of Beneficial Life (London) Limited, which is authorised and regulated by the Financial Conduct Authority.
You may be charged a fee for mortgage advice which could be up to 2% of the loan. The precise amount will depend on your circumstances but we estimate it to be 0.75% of the loan amount.
Registered in England and Wales no.11215166. Registered office: Spectrum House, 2b Suttons Lane, Hornchurch, Essex RM12 6RJ
The information on this website is intended for guidance purposes only and does not constitute advice. Furthermore, the information on this website related to the UK market for consumers living in the UK only.

Special Note: Most Buy to Let mortgages are not regulated by the Financial Conduct Authority

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