Protection

With falling markets and the value of your traditional safety nets – savings and investments - greatly reduced, you need to consider now more than ever how you would cope financially should the worst happen.

Life Cover gives you financial security when you need it most. For most of us critical illness, injury or unexpected death is not something we like to think about. But no matter how young and healthy we feel now, it pays to be prepared for the future.

As independent advisors we will compare products and prices from all the major Life Insurance Companies, advise you and recommend suitable solutions.

Main Policy Types:

There are many different types of protection products available in the market place, so it is important to discuss specific requirements with a professional advisor to ensure that the cover put in place is the most suitable to individual needs. We will advise on the level of cover required and both the correct product and the length of time for which the cover is required.

The options include:

Level Term Assurance

Level Term Assurance provides cover for a specific time frame, usually at a fixed monthly cost. Some policies allow cover to be indexed-linked which means that cover will increase annually by usually 5%. At the end of the term, the policy will cease and there are no further benefits. There is no surrender value with this type of product.

Convertible Term Assurance

A Convertible Term assurance policy is similar to a level term plan in that the cover is chosen for a specific term, there is usually a fixed monthly payment and some can be indexed-linked to allow an annual increase in the level of cover.

Where it differs is that it allows further cover to be put in place at the end of the existing policy. This cover costs approximately 10% more than the level term policy but it is worth paying this small extra for this valuable option.

Whole of Life Policy

A Whole of Life policy can provide cover to last throughout your life and there is usually a surrender value building up within the policy. Some contracts are reviewed after ten years and periodically thereafter to ensure that there is a sufficient premium being paid to maintain cover until the next scheduled review. Cover generally increases at each review.

Mortgage Protection

Mortgage Protection policies are generally put in place to cover an outstanding mortgage loan amount. For most home loans, it will be a requirement of the lender that such a policy is put in place and cover is usually for the amount and the term of the loan.

As this cover decreases in line with the reducing loan balance, this cover is often the cheapest form of life assurance cover. It is worthwhile to periodically review the cost of this cover, as the rates charged for this type of cover change from time to time as it is a very competitive area in the market from a price point of view. While initial monthly savings could be small, when the amount is totalled over the remaining term of the mortgage, it can be significant

Pension Term Assurance

Pension Term Assurance is also known as Pension Life Cover and Self Employed Term Assurance, although this does not mean that it is exclusively available to self-employed persons. This is basically a level or convertible term life assurance plan that someone can take out up to their chosen retirement age (up to age 75 with some companies), and the premiums payable are eligible to receive income tax relief at the marginal rate for the self-employed and corporation tax relief if paid via a company. You can add the indexation and conversion options into this plan.

The only potential drawbacks to this type of policy is that is cannot be assigned to anyone and can’t be taken out under joint life. You will not be able to use this policy as cover for a loan with a lender.

Business Protection:

The aim of Business Insurance will differ depending on the structure of your client’s business and its key risks. Our range of products will allow you to tailor a business protection solution to suit your client’s needs.

The following is a brief description of the four product offerings:

Partnership Insurance designed for a partnership to protect against the risk of death or serious illness of a partner by providing a lump sum to assist the remaining partners to purchase his/her share of the business.

Co-Director Insurance
And
Corporate Co-Director Insurance designed for a company to protect against the risk of death or serious illness of a director/shareholder by providing a lump sum to assist the remaining directors or the company to purchase his/her share of the business.

Keyperson Insurance designed for a business that needs to protect against the financial impact of losing a key employee of the business.

Serious Illness:

Serious Illness Cover (SIC) also known as Critical Illness Cover will pay out a tax free cash lump sum in the event of the insured person suffering from one of a list of serious illnesses covered by the policy. The definitions can vary between companies and also some companies cover more illnesses than others. You can also add Serious Illness Cover to a Term Assurance policy (Accelerated Serious Illness Protection).

Income Protection:

Income Protection provides replacement income in the event that you are unable to work due to any accident or illness. This income will pay bills and living expenses.  Payments commence once the policyholder has been disabled for a set period of time (known as the deferral period).  Tax relief at the marginal rate is available on premiums paid for this product. Payments will continue until you recover and are ready to return to work, or until your chosen retirement age if you are unable to get back to work. The benefit paid cannot be more than 75% of your net earnings including any state benefit paid to you while out of work. One of the main benefits of this product is tax relief at the marginal rate is available on all premiums paid.

Serious Illness Cover and Income Protection are very different in terms of method of payout, tax relief, underwriting. We will talk you through these main differences and recommend a solution most suitable to your individual circumstances.

If you require more information about Life Assurance, please Contact Us