Protection

It’s easy to underestimate your own value. You insure your homes, cars, valuables and pets, but may forget the life protection that would insure the income to provide all of the above.

What would happen if you were to fall ill, or worse? You would want to make sure your loved ones are protected. With appropriate planning for your family’s future you can get peace of mind, know that they will be financially stable, and their standard of life is secured.

Protection planning can involve looking at life protection, critical illness cover and income protection. We can discuss with you the solutions most relevant for your specific needs, and search the whole of the market to find the best possible offers.

Life Protection

Taking out a life protection policy can put financial provision in place for your family in the event of your death. Policies need to match your specific circumstances, which means it’s crucial to choose the right term and sum to insure. The cost can vary between providers and change regularly, so it’s worth looking around to find the one that best suits your needs.

Term Assurance

Term assurance may be suitable if you only need cover for a certain period of time, perhaps until your children have moved out, or the mortgage has been paid off.

You decide on how long you want the policy to last for. If you die during this time, it pays a tax-free cash lump sum to your loved ones. However, if you live beyond the end of the term, your plan will have no cash value. There are different types of term insurance available;

Level-term Assurance

With level-term assurance, your policy will pay out the same amount at any time during the agreed period.

Decreasing Term Assurance

The sum insured reduces over the term of the policy, meaning the pay-out will decrease by an agreed amount each year. This could be suitable if, for example, you plan on paying your mortgage off by a set time.

Family Income Benefit

This is another form of decreasing term assurance. It’s structured to replace a regular amount of income for a fixed term in order to replace the income lost when someone dies, rather than a lump sum being paid out. As it’s effectively a decreasing-term assurance paying out a regular tax-free income, it’s often cheaper than level-term lump sum insurance and therefore could be useful when you need to keep premiums to a minimum.

Relevant Life Insurance (Business only)

This is a life insurance policy taken out on your behalf by your employer to provide cover up until your 75th birthday, as a maximum. The premiums are tax-efficient to both the employer and employee, and can be a good alternative to death in service benefits, especially for smaller companies. The benefits are paid out in a tax-free lump sum, with no limits on the amounts that can be insured. Conditions will need to be met to qualify as relevant life with HM Revenue & Customs (HMRC) in order for the appropriate tax benefits to apply. Our experienced financial advisors will be able to discuss this with you further.

Critical Illness Cover (CIC)

The thought of becoming ill is an unpleasant one, but it’s important to consider when planning for the future. If you suffer a critical illness and survive, will your family still be able to afford the cost of living?

In addition, you want to feel able to take as much time as you need to recover from your illness, which is often not the case with the financial pressures that loss of income can bring.

Critical illness cover is a type of insurance policy that pays out a tax-free lump sum in the event that you are diagnosed with a specific illness or medical condition during the term of the policy. Factors that will affect the cost of critical illness cover will include the sum insured, your age and medical history.

Income Protection

If you find yourself unable to work, how long could you and your family survive on your savings or sick pay from work?

Permanent health insurance is a long-term policy that is designed to pay a regular income should you develop an illness or injury that prevents you from earning. It will continue to pay-out until you are able to return to work, retire, or until the policy ends.

Writing a policy in trust

While the proceeds of a life insurance policy won’t usually attract income or capital gains tax, under normal circumstances, it will form part of your estate, and may therefore be subject to inheritance tax.

Putting the benefits paid on death into a suitable trust can be a very useful way of ensuring they are passed on to the intended beneficiaries at the right time. The pay-out also won’t form a part of your estate when considering any inheritance tax liabilities.