Quite often you hear ‘it could never happen to me’ or ‘I’ll sort it out later’. Well the old maxim of “failing to plan is planning to fail” is no better suited to the ignoring of crucial decisions on protection
Quite often you hear ‘it could never happen to me’ or ‘I’ll sort it out later’. Well the old maxim of “failing to plan is planning to fail” is no better suited to the ignoring of crucial decisions on protection.
As one would imagine, there are many types of Protection Policies to choose from. Finding the one that provides adequate cover and the right protection is not as easy as you may think. As advisors we can help you find the one that best meets your requirements
Life Assurance
What is it?
A Term life insurance plan is the most basic form of life insurance and is usually the cheapest way to insure your life. It covers you for a fixed period and pays out a one off lump sum if you die during the policy term
With some term insurance policies you can add additional options, for instance critical illness cover. If you do add on critical illness cover, the plan will pay out once on diagnosis of a qualifying critical illness or if you die during the term of the policy
Who is it for?
This type of plan is designed for those who want to leave a lump sum in the event of their death within a specified time period whilst keeping the cost to a minimum. Term assurance can protect your family from the financial implications of a personal tragedy and is particularly important if you have young children or dependents. It can be used to cover a mortgage, other loan or to ensure that your family is protected from the effects of having to repay a debt after the main breadwinner has passed away. As advisors we can help you find the plan that best meets your requirements
Critical Illness Cover
What is it?
A Critical Illness plan is designed to pay out a lump sum on the diagnosis of certain specified illnesses. It is often ‘bolted on’ to a life assurance policy as an additional benefit but can also be a standalone plan.
Who is it for?
This type of plan is designed for those individuals or families whom want a lump sum if they are diagnosed with a serious illness. As an example of where this lump sum could be used is to repay a loan, mortgage, or perhaps pay for time off work. The lump sum could even be used to pay for any necessary alterations to your home.
The quality of cover and the illnesses covered can vary significantly between different providers. As advisors we can help you find the plan that best meets your requirements.
Income Protection
What is it?
An Income Protection plan is designed to pay out a regular income in the event you are unable to work due to an accident or illness. These types of plans continue to pay out an income as long as you are unable to return to work up until the end date of the policy (typically your normal retirement age).
This type of plan is quite often seen as the foundation of any financial planning as it is likely that other plans will have to be given up if you do not have sufficient income coming into the household.
Who is it for?
This type of plan is designed for anyone whom is working (employed or self employed). It’s worth pointing out that even if your employer provides sick pay, it is unlikely to last for longer than twelve months and so ongoing protection is essential.
Plans can be adapted to fit in with any existing protection you might have. As advisors we can help you find the plan that best meets your requirements.
Unemployment Cover
If you are in full time employment or self-employment you should consider the benefits of a redundancy cover plan. We are all vulnerable to the potential of involuntary redundancy and having 'a job for life' is no more. For your own peace of mind consider how to minimise the possible financial impact of such an important event.
How can you protect yourself against involuntary unemployment?
Part of the payment protection insurance - PPI - family, redundancy cover provides a tax free monthly amount that can be used to help you manage financially in the event of involuntary unemployment.
Once you are made involuntarily unemployed, the policy will begin to pay out after a set period of time, and whilst this can vary among different providers it is typically from 30 to 90 days after redundancy.
What income level can you expect?
A typical plan will allow you to insure up to 50% of your monthly gross earned income, or up to £1,500 - whichever amount is the lesser, and when you compare this to whatever you may receive from the State, (not everyone is eligible for financial assistance from the Government if they are made unemployed), you'll appreciate how valuable this type of cover can be.
How long will the cover pay out for?
This varies from provider to provider but most policies will pay out for up to 12- 24 months, or until you get back to work - whichever event is sooner, giving you peace of mind in knowing that you are still receiving an income even when yours has ceased.
Why it's important to consider a policy?
We've already mentioned that getting help from the State can be difficult and there are eligibility hurdles to jump. If, for example, you were unemployed and had mortgage commitments to meet, even if the State were to contribute towards your mortgage, it would only cover the interest part of the repayments.
Unemployment cover can be quite affordable and can cost from just a few pounds every month for every £100 worth of protection required. We can advise you on appropriate providers for your needs. This type of policy gives you financial breathing space at an already difficult time.
If you are in full time employment or self-employment you should consider the benefits of a redundancy cover plan. We are all vulnerable to the potential of involuntary redundancy and having 'a job for life' is no more. For your own peace of mind consider how to minimise the possible financial impact of such an important event.
Accident Sickness and Unemployment
Accident Sickness and Unemployment (ASU) insurance is the only policy that covers you against losing your income through redundancy.
In the current climate of job uncertainty, knowing that you'll be able to keep up to date with your bills in the event of redundancy is one less thing to worry about, and having that peace of mind knowing that your family’s welfare and lifestyle can be maintained if you become unemployed due to job cuts, or simply through ill-health can be a weight of one's mind.
WHAT DOES ASU PROVIDE?
ASU insurance is a time-limited insurance product that provides short term assistance in paying your debts, in the event that you are temporarily unable to work.
ASU cover usually starts a month after you stop work, and pays out for a limited period of 12 or 24 months, depending on the policy.
When considering ASU insurance, reading the small print is essential, as there are important differences between the various policies available. It is particularly important to check which health conditions are covered by each policy, and if you have had a particular health issue in the past, to make sure that is included, or, more importantly, that it is not excluded for you.
Mortgage Payment Benefit
It is quite possible that when times get tough you could end up worrying about how you're going to meet your mortgage payments, whether you're a young, first-time homeowner, with a growing family or approaching retirement.
Peace of mind
Your home really is your most important possession and if you fail to pay your mortgage, you and your family could be faced with repossession and homelessness. For this reason mortgage insurance is a very important product to consider, whether you're buying a new home or you're simply looking for extra security and peace of mind
Investment protection
If you were unable to work due to an accident, illness or unemployment, you would feel better knowing that your investment is protected
Monthly payments
Mortgage insurance offers you tax free monthly payments that help you pay your mortgage should your income cease for any reason. This could be as a result of an accident or long-term illness that has left you unable to work, or because you have been made redundant.
If you were unlucky enough for any of this to happen, a comprehensive mortgage payment protection policy could ensure that you don't fall behind on mortgage payments, thereby removing that worry while you're out of work.
Terms & conditions
It is important to be aware that there are conditions attached to a mortgage insurance policy, and we will advise you on this. As an example some policies may not pay out until you have been out of work for a full month, although many will then backdate your first payment to include this period.
Some mortgage insurance policies only cover a limited amount of time, usually 12 – 24 months, and some may offer you the option to extend your cover period, so it's vitally important to consider your circumstances before choosing to buy a mortgage payment protection policy.
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The Mortgage Corner (Cheshire) Ltd is an appointed representative of PRIMIS Mortgage Network. PRIMIS Mortgage Network is a trading style of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority (FCA 192642). Registered Office: 20 High Street, Congleton, Cheshire, CW12 1BD. Registered in England and Wales, Registration No 4912909
