Insurance For You And Your Family

Insurance is the basic underpin of financial planning.  We put great value on insuring our ‘things’, such as our mobile phone, boiler, pets, holiday, car, home, contents and so on.

Income;

If you cannot work due to short or long-term sickness, direct debits will become a problem.

Making sure you continue to receive an income or lump sum if the illness is very severe, will provide a very solid underpin to protect your lifetstyle and family needs,

  1. Can you afford to break into your savings to cover loss of income
  2. How would you make up the lost pension contributions
  3. How long can you survive with no income

Critical and Severe Illness

The options have expanded over recent years, so that many more conditions can be included.  The costs of these policies have reduced as policy holders can opt for severity based cover, which will pay out according to the effect any claim will have on your life.

  • Do you know what conditions your existing policy covers
  • With extended recovery times for severe illnesses, could you cope financially

Debts and Mortgage

Making sure your debts are cleared on your death or that of your partner is so important and is the most basic of protecting and providing for your family.

Children

Make sure that once all the debts are cleared, you leave an income or lump sum to maintain education costs or provision to maintain their lifestyle needs.

Company Owners

If you are a company director and you have life cover to protect your family, you could be paying more tax than you need to.

How a Relevant Life policy could work for you;

  • Although the company makes the payments, they are not treated as a benefit in kind, and so would not be included in your income tax assessments.
  • Unlike a Death in Service group life scheme, the benefit will not form part of your lifetime pensions allowance and premiums won’t form part of your pension annual allowance.

This type of policy is suitable for;

  • High earning directors and employees who do not want their death-in-service benefits count towards their lifetime allowance.
  • Small companies with too few employees for a group scheme that want to provide employees and directors with tax efficient life cover.
  • Shareholders in small companies who wish to protect against the cost of buying out a deceased shareholders beneficiaries.

Business interests

Many of us are shareholders in small family or private businesses now.  What often gets forgotten is the issue of the death of a shareholder.

Take an example of two businesses owners, with separate families.  Normally, each director and shareholder of that business will leave all their wordly goods to their partner or children.  This will include their shareholding in the business.

On their death, their partner or children become shareholders in the business.  How will the remaining Director(s) work with that outcome?  How will the shares be valued?  How will the remaining Director buy out the shares to avoid having a business partner they didn’t choose?

Two partners, children and a mortgage – most will cover the mortgage, but nothing in addition.

In the event of death, the surviving partner will be left with a house and no mortgage.  There are many scenarios dependent on levels of income, who was working and so on, but let’s look at some questions;

  • Can they afford to stay in the home when all other bills are accounted for?
  • Will the remaining partner need childcare to continue their career?
  • How will future education be paid for?
  • How much do you owe above the mortgage?
  • Are you relying on your partner for a pension?

Your existing policies

Reviewing the cost and value of your existing policies needs to be done at regular intervals.

  • Were you a smoker and have stopped since taking out a policy.
  • What illnesses does your policy cover and are they relevant.
  • Have you had an addition to the family since your cover started.
  • How has inflation affected your current levels of life assurance.
  • If you have covered the main income earner, how much to replace a stay-at-home partner.
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