Wanting to protect those that you care most about is a feeling that comes naturally to us all. One of the most important ways you can do this is to make sure your family is protected financially.
There are a number of questions we should ask ourselves when looking at financial planning such as, if you were to pass away suddenly would your family have sufficient money to survive? Could they afford to pay the mortgage payments without your income? What would happen if you were to be taken critically ill? Who would pay the bills if you were off work with a long term illness? How long would your employer pay you sick pay? If you have answers to these other than ‘I don’t know’ that’s great, but from our experience most clients don’t.
At Base Financial we offer advice on all areas of protection. We find that the most common areas that people want to protect are ensuring the family is able to stay in the family home in the event of an income stopping suddenly and simply ensuring there is enough income to pay the bills in the event of an illness preventing a major income earner from working.
There are a number of different types of insurance available and those types of insurance can be set up in a number of different ways, we are here to help make sure your family protection is arranged in the right way. Below are the main types of insurance available with some examples of how they could be used.
If you pass away within a set period there is a sum made available to the beneficiaries of the policy. This sum could be used for a number of purposes. Most commonly its used to repay a mortgage but could also be used to provide a lump sum to help pay for a potential inheritance tax bill or a lump sum that can be used to provide an income. It can be set up with varying terms, such as 25 years to cover a 25 year mortgage. It can also be arranged with the amount of cover remaining level through out the term, on a reducing basis so that it keeps in line with a mortgage that’s been set up on a repayment basis or an increasing basis, perhaps to ensure a lump sum to protect your family keeps pace with inflation.
These plans have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.
Critical Illness Cover
If you were to contract a critical illness such as a heart attack or stroke then there would be a sum made available to the beneficiaries of the policy. Quite often, Critical Illness cover is combined with life assurance as part of a package to protect a mortgage. There are again a number of options available, similar to term assurance in that terms and level of cover are set at outset but another major factor is the difference between providers. Some cover more illnesses than others, some pay out more or less for different levels of severity of the illness the policy holder. Finding the right provider for you is really important.
It is important to understand the Critical illness definitions and exclusions. We can help you select the right policy for your needs