The main providers of financial protection products are Life Assurance companies and General Insurance companies.
Independent Financial Consultants provide products that insure certain risks, i.e pay out a benefit in the event of a particular event insured occurring e.g death or serious illness.
Level Term Assurance This is the most basic type of life assurance, this provides life cover for a fixed period of time in return for a fixed premium. Each month you pay a fixed monthly premium in return for a fixed life cover amount (also known as the sum assured) over a fixed term. The life cover is amount is paid out if the death occurs of the policy holder(s) before the end of the policy term. It has no value when the term ends of if it's stopped early. Term assurance is the cheapest form of life cover because cover is only provided for a fixed period.
Convertible Term Assurance - This is exactly like Term assurance but with one added benefit. The policy holder has a 'conversion option' which he or she can exercise at any time during the term, to 'convert' the cover under the new policy running for a longer period, without having to produce fresh evidence of health, at the time of conversion. The premium for the new policy will be based on the life assured's age at the time of the conversion. If the policyholder does not exercise the conversion option the life cover ceases at the end of the term, just like term assurance. Decreasing Term Assurance - The policy -holder pays a fixed monthly premium, the life cover amount gradually reduces over the term of the policy. Similarly, the benefit is only paid on death before the end of the policy term. This form of cover is most commonly used in conjunction with a repayment (annuity) mortgage. The term of the policy will be the same as the mortgage term, typically 25 or 30 years. By the end of the mortgage term, the cover will have reduced to zero as the mortgage will then have been fully repaid to the lender, assuming all repayments have been made on time.
Serious Illness Cover Serious Illness Cover is a form of "living insurance". It is sometimes called Specified illness Cover or Serious Illness, but it aims to do the same thing - rather than paying out when you die, like life cover, it pays you a lump sum if you are diagnosed as suffering from one of a list of serious conditions. It is different to cover such as health insurance in that it is aimed at serious conditions only that may have a major effect on your family finances. The lump sum paid is totally tax-free and aims to replace any shortfalls in income or increased expenditure due to illness.
Serious Illness cover is especially useful for:
· People with mortgages. At the very least, your mortgage should be covered. If you were to suffer a serious illness and give up work, it is vital to ensure that at least you'll have the money to pay off your mortgage or meet the repayments.
· Self employed people /employers of small companies. Unlike people who work in large or semi-state companies, often these people will have no other illness cover / replacement income in place.
· People with dependants and children. Obviously it is more important to secure your income if you have other people dependant on this income.
Specified Illness Cover Serious illness can strike at any time. Men have a one in four chance of becoming seriously ill before the age of 65. For women, that figure is one in five. The most common illnesses are cancer, heart attack and stroke. The effects can be catastrophic. Not only could you face increased medical bills on top of your regular bills, but you could face them when your income is reduced because you can't work.
Vital Care Cover This covers you against any medical condition (caused by illness or accident) that leaves you unable to look after yourself in the long term. It pays an extra tax-free amount equal to the amount of specified illness cover you have chosen.
Hospital cash cover Hospital cash cover helps to pay some of your day-to-day bills if you are in hospital for at least three days (72 hours). This cash is yours tax-free to spend in any way you want.
Accident cover No matter how careful we are, accidents can happen at any time - in the home, in the garden, playing sport, out and about or at work. Almost half of all accidents happen to people when playing a sport. A broken bone, even a minor break, could keep you off work for months so it makes sense to be prepared.
Children's benefits When you take out life cover, specified illness cover or hospital cash cover all your children aged between one and 21 are automatically covered too. If you have any new arrivals in the family, please let us know and we can then add them on to your policy - at no extra cost, of course.
Inflation Protection This option allows you to increase your cover every year (to keep in line with the cost of living) without providing evidence of health. You will have to pay an extra charge for this benefit. This extra charge will depend on your age and the term of your policy. At the moment the amount you are covered for will increase by about 5% a year. This increase of 5% is not guaranteed and may change from year to year. The cost of your cover will go up by 7% each year to reflect the extra cover and the fact that you are older. This option protects the real value of your cover as time passes. If you do not take this option, your cover will stay the same. If you refuse this option two years in a row, you will not be offered any further increases.
Pension Term AssurancePension Term Assurance is life cover that pays your dependants a guaranteed lump sum if you die during the term of the plan. The advantage of this type of life cover is that it costs you less because if you are eligible you can claim tax relief on your contributions.
You pay a regular amount of money into your Pension Term Assurance plan. Your contribution provides the level of life cover you need until the date you have chosen for retirement. Your advisor can help you decide how much cover you need. The cost is guaranteed not to increase before that date, giving you added security, and you get tax relief on each contribution that you pay - so you benefit straight away.
Business Protection Plan Anyone in business today wouldn't think twice of not insuring their business against loss from fire or theft. However, there are many other circumstances that can have damaging and lasting consequences for your business. Indeed, without the right kind of protection, your business, even your family's finances, could be in financial ruin.
Ask yourself the following:
· How would your business survive if one of your key employees or shareholders became seriously ill or died suddenly?
· If your business partner died what will happen to their share of the business?
· How would you feel about a shareholder's family joining your business if he died suddenly?
· If you died what will happen to your share of the business?
· Is any of your family in a position to take your place in the business?
· How will your family survive financially?
There is very little in life we can be absolutely certain of, but one fact is guaranteed, we are all going to die...some day. The one unknown, thankfully, is that we have no idea when this will be. However, the odds of one partner in a 2 or 3 person business dying or becoming seriously ill before retirement are probably a lot higher than you might think.
Many problems can arise for a business when a partner or key employee is out of the picture due to death or serious illness. Some of these problems could be alleviated with adequate financial planning to provide the funds to allow options and choices to be made by all parties. Arranging adequate Business Protection Insurance is the only way to ensure that funds will be available in a cost efficient manner to ensure the continuity and the survival of the business.
Inheritance Options Plan Inheritance Options gives you and your family flexible protection against the cost of inheritance tax.
Personal or family protection
You can arrange the plan to pay out when you die (single life) or to pay out only when both you and your husband or wife die (joint-life last-survivor). The joint-life option is commonly used for family situations, along with a joint-life last-survivor will. This means inheritance tax will only arise when your children inherit following the death of both you and your husband or wife. The level of protection you need and whether you need a single or joint-life plan will depend on the size of your estate, who you plan to inherit your assets, and when they are likely to inherit.
Contact us for a Free Initial Discussion about your Protection requirements:
• Tel: 01-6601 016
• E: firstname.lastname@example.org