What is Protection

ProtectionIt is designed to help protect against the financial impact of death or critical illness or loss of income on you and your family.

For most families it is income rather than savings that enables them to enjoy their standards of living. Loss of that income on the death of the breadwinner usually causes a reduction in a family’s quality of life.

Why should I have it?

To cover things such as:

  • Outstanding mortgage or debts
  • Family – making sure your family are financially secure
  • Business – leaving a legacy for your family
  • Income – making sure that in the event of death or illness you and your family can continue to meet any financial commitments.

What benefits does this bring?

  • Personal and family security
  • Comfort – knowing that loved ones are financially secure
  • Peace of mind – knowing that financial commitments are being met.

Income Protection

Its Aims:

  • To pay you a regular benefit to replace a loss of earnings if you are unable to work due to illness or an accident.
  • To provide cover for the duration of the policy no matter how many claims you make.

Most plans will cover you for between 50% to 65% of your gross earnings, the amount of benefit you can be covered for is usually between £50 per week to a maximum of £500 per week. These plans are flexible, and you can change the benefit according to your circumstances now and in the future.

The plan offers you a choice of how soon the benefit can commence to allow for any period you expect your earnings to continue. This is known as the deferred period, and you can choose from – day 1 to 4, 8, 13, 26, or 52 weeks.

The benefit is paid as income which is tax free if paid direct to the insured person.

Mortgage Protection

Designed to help protect against the financial impact of death or critical illness on you and your family.

The plan will do this by paying a cash lump sum to help pay off your mortgage if a claim is made during the period of cover. Mortgage protection is a life assurance policy which pays out a lump sum which will then enable you to pay off your outstanding mortgage.

Mortgage protection can be:

  1. Level term assurance – covers an interest only mortgage
  2. Decreasing term – covers a repayment mortgage.

Critical illness cover can be built into your plan, this type of cover pays out a lump sum on death or if you are diagnosed with a critical illness.

Term Assurance

Term assurance is a life assurance policy that is designed to run for an agreed term at an agreed sum assured at the lowest possible cost.

This type of policy has very few frills and will not accumulate any cash value. You can have a level or increasing term assurance.

Whole of Life Assurance

A whole of life assurance plan is designed to run for the whole of the insured person’s life, it does not have a term in years.

It will pay out the amount of the life cover in the event of the death of the life assured whenever that death occurs.

On investment limited plans a surrender value may be payable if the policy is terminated.

Family Income Assurance

The family income plan aims to pay tax free income per annum until the end of your chosen plan term, if the person dies or is diagnosed with a terminal illness.

  • You choose the annual amount of cover you need.
  • You choose how long you need the cover for.
  • You choose level or inflation linked cover.

There is no minimum or maximum annual amount of cover you can have. Claims paid from the plan will not be subject to either income tax or capital gains tax.

What do I do now?

It can be complex to work out the type and level of protection you need for you and your family, by review of existing protection with selection of new protection.

Please call Jan on 01706 830678 for advice, or use our enquiry form.