Storm clouds
Do I really need protection?
What is critical illness cover?
Can I protect my business?
How much cover do we need and for how long?
I haven't got any dependants so why do I need it?
Can I change my existing policy?
I've got that cover through my employer?
Im only young I don't need it?
Im not buying a house/ I don't own a house so why do I need it?
Does it pay out for cancer?
Insurance companies find ways not to pay so I don't trust them?
Will I have to pay inheritance tax?
Can you set up joint policies?
Silver linings
Don't think of insurance as a sad subject, think of it as doing something good for your loved ones
You don't have to die to be able to benefit from this type of protection
Think of this as the insurance that lets you live
We take care of everything from the application, to the online underwriting, and communication between you, the insurer and your doctor if need be
The younger you are when you take out the policy the cheaper it will be
We put your policy into trust, this helps to alleviate inheritance tax liabilities
If you run a business with employees or partners, we can help you set up a policy that will assist if one of your key workers is ill, or if one of your partners dies.
If you prefer we are even able to set up life cover in such a way that your family will receive monthly payments rather than one lump sum.
We carry out a full professional review on any existing policies you may have with employers, and that you have set up privately.
We compare the benefits, look at the amount of cover, and ensure that you have the right policy at the right price for you. We can tailor everything.
A reasonable policy can cost less than the cost of your daily coffee for a month.
Do I need it?
Demystifying the small print inside insurance
It's not me, it's you...
If you are unfortunate enough to die unexpectedly, whilst you won't see the benefit of the life insurance policy (for obvious reasons), it can help to take care of the financial needs of the dependants that you leave behind.
It can be used to help clear a mortgage and any other outstanding debts. It can also be set up to provide a lump sum or regular income to help cover your loved one's day to day living costs.
Knowing that they are going to be taken care of financially, should anything happen to you, does offer great peace of mind.
However, its not quite as simple as whether you need life insurance or not. There are other considerations such as how much cover do you need and how long do you need it for.
What type of policy?
Working out which life insurance policy is right for you depends on many different factors.
The next thing to consider is what type of cover you need, and this is generally determined by what you need the cover for.
For example, if you need cover to protect a repayment mortgage, then the best type of policy for you would be decreasing term cover. This would normally be set up over the term of your mortgage and the amount of cover will reduce over time as your mortgage balance reduces. However, you may have an interest only mortgage and so a level term policy would be much more suitable.
It might however be the case that you want a policy that runs until you die (at whatever age that may be) and pay out a tax-free lump sum to your family. For this you would consider whole of life cover.
You should also consider critical illness cover at the same time. This type of insurance is more expensive, but it provides you with financial protection even if you don't die. If you are diagnosed with a critical illness or suffer a life changing accident this policy pays out a lump sum which can give you some financial peace of mind, at what is likely to be a very stressful and worrying time.
There are also other types of policy available such as over 50's life cover, which is a more specialist policy that normally offers guaranteed acceptance. However, cover can get expensive as the older you get the more expensive the premium
So how much do I need?
A good starting point is working out how much life cover you think you will need (easier said than done so speak with a professional). Consider if you already have any cover in place through policies you have set up yourself or through your employer. This is known as death in service benefit and is generally around 3 - 4 times your annual salary.
As professional advisers, we suggest that a good starting point is enough to pay off your mortgage and any other outstanding debts you may have. This obviously takes a large financial burden and worry away from your family.
The next thing to consider, are your dependants. You may wish to leave an excess of funds to pay for things like living costs, education and childcare. You may even wish to leave some funds for your own funeral.
Anything else?
The most important thing when taking out a life insurance policy, is to make sure its suitable and that you are covered for what you think you are. Check for exclusions.
As an example of the above, whilst the policy will cover you for death from an accident or unexpected illness, if you didn't disclose things properly at your application and you have drug or alcohol dependency or even undisclosed health conditions, you may not be covered.
The moral is be honest. If you are a smoker you are also likely to find that your premiums will be significantly higher.
Tips
As we have said in another post, do not put off taking out a policy. The older you get, the more the premiums increase. The younger you are when you take out your policy, the lower the premiums, and as you can fix your premiums, this guarantees lower monthly outgoings.
If you are buying cover with a partner, you may be offered individual policies rather than a joint one. This does have benefits, which your adviser can explain, but it could also be slightly more expensive, so always consider joint, if cost is the issue.
However, with a joint policy, if one of you dies, the policy pays out and then ends, whereas with single policies, the other policy will continue to provide cover for the surviving partner.
You should also talk to your adviser about trusts. If you put your policy into trust, when the policy pays out, the proceeds will avoid your estate and therefore not attract inheritance tax.
Questions
Case Stories
After helping us brilliantly with our mortgage Craig did another sterling job on advising and helping us with our mortgage (protection assistance) life insurance. Yet again, superb service and great knowledge from Craig. Faultless!
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No worries
Once you have the right insurance it takes a weight off of your mind. You're free to enjoy your property and your free time.
life for living
