There are two main choices when it comes to insuring your life; life assurance and life insurance.
Life assurance pays a tax-free sum to an individual of your choice when you die. It provides you with cover for your entire life, as opposed to life insurance which generally only covers you for the duration of the term of your policy.
With death a certainty, opting for life assurance does provide your family with a guaranteed sum. However, your premium will be significantly higher than with, for example, a fixed term life insurance policy.
Policy flexibility is also more limited when choosing life assurance. Life assurance policies generally allow for increasing cover but rarely allow for decreasing cover, so your premium won’t be reduced over time, even if you have paid off significant amounts of your mortgage or other loans.
Typically, life insurance offers level, decreasing or increasing cover, allowing you to customise your policy depending on your changing circumstances.
CRITICAL ILLNESS COVER
Critical illness cover provides a tax-free, one-off sum if you are diagnosed with a serious illness that affects your ability to work and earn. It offers significant peace of mind, safe in the knowledge that you and your family won’t need to be concerned about your finances whilst you undergo treatment and recovery.
Critical illness cover varies significantly, especially when it comes to which illnesses are covered. It’s therefore vital to find a policy that is comprehensive and will support you in the face of unfortunate circumstances.
Do bear in mind that critical illness cover does not provide a lump sum in the event of your death, although some insurers offer a critical illness element as part of your life insurance policy.
INCOME PROTECTION INSURANCE
Also known as permanent health insurance, income protection insurance provides you with a regular income if you are left unable to work through long-term illness or incapacity.
While it may not match your usual salary, income protection should cover a good proportion of your income. Any pay-outs are tax free and you are still able to access other state benefits without penalty.
Most income protection insurance policies tend not to come into effect immediately and some might not allow claims for many months after you are unable to work. Each policy will have its own terms, so it’s important to read the details carefully and be mindful of your employer’s policy on sick pay, which might provide interim support.
If you are considering income protection insurance, you should research whether it offers you the best choice of protection in your circumstances. For example, it can be a more expensive option, especially when compared to critical illness cover. It’s important to determine if the terms covering pay-outs, and which instances of illness or incapacity are applicable, make it a more suitable option.
CHOOSING LIFE INSURANCE AND PROTECTION SERVICES
Seeking expert advice is vital when it comes to planning how to protect your finances.
Our team will take the time to discuss your requirements with you and your family, before researching and recommending the right financial protection options.
We are also able to conduct a review of any existing policies to help you determine if you will be suitably covered if unexpected circumstances occur.
To discuss your circumstances in more detail please contact your nearest office.