There are various ways in which a family can protect itself, and because of the large range of products available, there is usually an appropriate policy for most circumstances, and most budgets.
We can help with many ways to protect your family and your standard of living when you need it most. Click on the different protection options on the main menu to learn more about these.
Life insurance
There are lots of ways to protect yourself in the event of your death. Life insurance is designed to ease financial worries at the difficult time.
Level Term Assurance pays a lump sum in the event of death during the term of the policy. There is no investment element within a term assurance contract, so at the end of the term there is no maturity value and the life cover will end. The benefit is paid tax-free. Premiums are usually monthly and fixed throughout the term. As the term and benefit are known from the outset, Level Term Assurance can be a cost-effective method of protection for your loved ones.
Decreasing Term Assurance works in a similar way to Level Term Assurance, but the benefit is set at the outset and gradually decreases over the term of the policy. These policies can be used as cover for a repayment mortgage, or other loans where the amount of capital outstanding also decreases over time. The premiums are usually lower then a level term assurance policy as the benefit is reducing over time.
Family Income Benefit is a Term Assurance policy which pays a regular monthly/annual tax-free income in the event of death, instead of a lump sum, to your dependants up until the end of the term of the policy.
Critical illness covers
Critical Illness Insurance is usually available as an addition to all term assurance plans but can be bought on a standalone basis. Critical illness provides a lump sum benefit or income in the event of diagnosis of certain critical illnesses, such as cancer, heart attack, stroke, organ transplant, blindness, total and permanent disability. The illnesses covered will be specified in the policy along with any exclusions and limitations – these differ between insurers. Most providers now include an element of critical illness cover for children under the age of 18. Payments from critical illness cover could be used to pay regular expenditure, clear debt, pay for private treatment or make amendments to the home to adjust to a new way to living.
Income protection
Income protection provides a regular monthly income if you are unable to work due to illness or injury. This is a welcomed safety net to be able to keep up with current expenditure and lifestyle. The policy pays out until you can start working again ,retire, die, reach the end of the policy term or your chosen payment period.
Business protection
Relevant life insurance – This is a tax efficient way for limited company directors to arrange life insurance so it can be paid through the business. Relevant life plans should not be used for the benefits of the business and should be placed into trust for employee’s family or financial dependents.
Key person insurance – This allows you to protect your business from the financial impact of losing an employee whose death or illness would have a financial impact on the business. The policy is owned and paid for by the employer, so any pay-out is payable to the employer.
Loan protection – Business loan protection insurance will provide funds to repay a loan, commercial mortgage, or a director’s loan if one of the business owners dies or suffers a critical illness.
Shareholder protection – Shareholder are policies put into place by businesses to allow the surviving shareholders to purchase the shares from the spouse of the deceased Director in the event of death, or from the Director if he wishes to exit the business upon diagnosis of a critical illness. This type of policy helps business owners keep control of their company if one of the owners dies or becomes critically ill.