It’s an unfortunate fact of life that some of us get seriously ill or die unexpectedly. When such situations occur, in addition to the obvious emotional effects this can have on the family of the affected individual, there can often be a detrimental effect on finances caused by a reduction in income, be it temporary or permanent.
For this reason, although it can be an unpleasant prospect to face up to, we believe that it is essential to consider how not being able to work due to illness or death would affect the finances of loved ones and that life and protection policies should be considered as part of any sound long term financial plan.
As a matter of course, we always ask our clients about their existing life and protection provision; if they do not have any arrangements in place or do not feel that what they have is sufficient, but would like to explore their options in more detail, we will pass their contact details to our dedicated partners who will manage the application process from beginning to end.
There is a broad range of polices available, which have been designed to provide additional funds or income in specific circumstances:
Provides a lump sum that is payable in the event of death and can be used to provide financial support for family or to repay a mortgage.
Critical Illness Cover
Provides a lump sum upon diagnosis of a serious/critical illness. Some providers also include Life Cover within the plan at no extra cost. The lump sum could be used for any purpose but will typically be spent on repaying a mortgage or to provide financial support for the claimant and their family.
A long term insurance policy designed to protect income levels in the event of accident or sickness. This will ensure that monthly outgoings can still be maintained in the event of being unable to work. There are other providers of Payment Protection Insurance [Short-Term Income Protection] and other products designed to protect you against loss of income.
For impartial information about insurance, please visit the website at www.moneyadviceservice.org.uk
Family income Benefit
Designed to provide a monthly benefit to family in the event of the death of the policyholder. If selected, the plan can also provide a monthly benefit in the event of being diagnosed with a critical illness, the benefit will then be provided until the pre-determined end date for the plan.
Relevant Life Insurance
Specifically suited to someone working within a contractor role, this allows for the provision of a payment in the event of death, thus replacing the ‘death in service’ benefit, typically offered by employers. The cost of the premiums can be funded via a limited company and offset against corporation tax, providing further tax saving opportunities.
Whole of Life
Very similar to Life cover, but terminates on death. This plan can be used to provide financial cover for those who may always be dependent, such as disabled children, or to plan against inheritance liabilities.