Ensuring your mortgage and family are protected should you unexpectedly pass away, fall ill or have an accident.
When planning for the future it is important to consider the financial implications death, sickness or injury may have on yourself and your family. We understand the risks in these areas and can advise on suitable levels of personal protection to ensure that you are covered against all eventualities.
Whether your need is to protect a mortgage, or your income should you fall ill, or you just want the peace of mind that your loved ones are financially cared for should the unthinkable happen, we are here to help.
Level term life assurance
A level term assurance policy is where the benefit remains the same for the duration of the term. This can be used to protect interest only mortgages where the balance outstanding does not reduce, or for family protection providing a lump sum payment to a surviving partner or chosen beneficiary.
As a whole of market insurance broker, we have access to all the major UK based insurers, to help you find the best policy to suit your particular needs.
Family income benefit
An alternative to a lump sum term assurance plan, these policies provide a monthly or yearly income over a chosen term in the event of a death. This is mostly used to provide a surviving partner with an “income” to ensure dependent children are adequately provided for.
It is important not to focus solely on the need to protect your mortgage in the event your premature death, which is why we will review all the options available to you to ensure both your mortgage and your family are adequately protected.
An income protection plan is designed to pay out a continued regular income in the event you are unable to work due to an accident or illness.
These policies can protect up to 60% of your provable earnings and are designed to commence when your employer sick pay benefits cease, to provide you with ongoing cover to meet your monthly commitments.
Income protection usually pays out until retirement, death or your return to work, although short-term claim protection policies, which last for up to 5 years of illness or injury are available at a lower cost.
A decreasing term assurance policy is usually designed to protect a capital and interest repayment mortgage. The premiums remain constant, but the life cover reduces gradually each year in line with the outstanding mortgage balance.
With our help and guidance, applying for life cover can be a simple straight forward process.
Critical Illness insurance
Critical illness cover is designed to pay out a lump on the diagnosis of specified critical illness. It can be “bolted on” to a life assurance policy as an additional benefit but can also be arranged as a standalone policy.
People are becoming more aware of the value of having critical illness. This benefit pay-outs once you have been diagnosed with one of the specified illnesses and survived for a set period (usually 14 days). This could be used to repay your mortgage, cover time off work or payment for alterations required to your home to help you whilst you recover.
Additional benefits within critical illness policies include terminal illness cover and children’s cover.
Buildings and content insurance
If you have a mortgage, your lender will insist that your property and their security is protected by buildings insurance. It is designed to pay out if your property is destroyed by fire, floods, subsidence of other forms of damage.
Contents insurance covers the loss of or damage to the contents within your home. This includes furniture, electrical goods, and other specified items. Some policies cover you of items you take outside of the home including, bicycles, jewellery, mobile phones and laptops. Additional benefits such as accidental damage and legal cover can be added to the plans at an additional cost.
Frequently Asked Questions
Do lenders insist that I have life cover to protect my mortgage?
You are not legally obliged to obtain life cover for a mortgage, but some lenders may still consider it a precondition of letting you borrow money to buy a home. For most homeowners, having financial protection in place makes sense. If you own a property, a mortgage is likely to be the biggest debt you can leave behind should the worst happen, so having a policy in place can help give you peace of mind.
How much does critical illness cover cost?
The amount you pay for critical illness cover varies according to each person. Factors that determine your premium include;
• Your age
• Whether or not you smoke (or have smoked in the last 12 months)
• How much cover you want to be protected for and for how long
• Health and lifestyle factors such as weight and family medical history, plus the job that you do. Some jobs are deemed to be higher risk which can lead to higher premiums.
Is Income Protection suitable for the self-employed?
Absolutely. In fact, income protection is particularly important for those who are self-employed. If you were unable to work for a period of time due to no fault of your own, could you afford to pay the bills? Could you continue to support your family financially? Unfortunately, the self-employed do not have the financial security of employee sick pay. Therefore, unless you have sufficient savings in place, income protection may be a sensible choice.
Should I put my life cover policy in trust?
As part of arranging a policy for you, we will ensure any life cover plan is correctly placed in trust. This can help protect your beneficiaries from inheritance tax, avoids probate and ensure the money gets to the right people quickly. A trust is imperative for joint life policies in the event of something happening to both policy holders at the same time.
What critical illnesses are covered?
The exact illnesses covered varies between insurers. However, certain conditions are covered as standard by most insurers. These can include:
- Heart attack
- Organ failure
- Multiple Sclerosis
- Alzheimer’s disease
- Parkinson’s disease
What defines a critical illness varies from provider to provider. It is important to know what is and isn’t covered by your policy. It is likely that your policy will pay out different amounts depending on the type of condition you are diagnosed with. Certain policies have the option to add specific additional diseases to your cover while some insurers will provide children’s cover within the plan.
What happens if I stop paying my premiums?
Quite simply – you are no longer covered. These policies have no cash value and if you cancel your policy you will not be able to make a claim. If you want cover again in the future you would need to reapply, with any new policy terms based on your age and medical situation at the time of application.
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