Insurance & Protection

Mortgage-related life insurance, often called mortgage protection insurance, is a policy designed to pay off your mortgage in the event of your death during the policy term. The goal is to ensure that your family or dependents are not burdened with mortgage repayments after your passing.

1. Decreasing Term Insurance:
   
   • The cover amount decreases over time, in line with your outstanding mortgage balance.
   • Ideal for repayment mortgages, where the balance reduces over the term.

1. Level Term Insurance:
   
   • The cover amount remains fixed throughout the policy term.
   • Suitable for interest-only mortgages or if you want consistent coverage for your dependents
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1. Financial Security for Your Family:
   
   • Ensures your loved ones can stay in the family home without worrying about mortgage repayments.

1. Lender Requirements:
   
   • While not always mandatory, many lenders strongly recommend it as part of responsible borrowing.

1. Peace of Mind:
   
   • It provides reassurance that your home is protected, even in worst-case scenarios.

1. Avoid Financial Strain:
   
   • Prevents your family from having to sell the property or take on significant debt to cover the mortgage.

1. Affordable and Tailored Options:
   
   • Policies can be customised to suit your mortgage type, term, and personal circumstances, making it a cost-effective safeguard.

 Critical illness protection is an insurance policy that provides a lump-sum payment if you're diagnosed with a serious illness or condition specified in the policy. These typically include illnesses such as cancer, heart attack, stroke, or other life-altering conditions. The payout can help cover financial obligations during a time when you may be unable to work or need additional care.

Policies vary, but they generally cover a wide range of conditions, such as:

• Cancer (specific types and stages)
• Heart attack
• Stroke
• Multiple sclerosis
• Organ transplants
• Major surgeries (e.g., coronary bypass)
• Certain permanent disabilities due to injury or illness

Note: It’s essential to review the specific conditions covered by your policy, as each insurer’s definitions and terms can differ.

1. Financial Security During Recovery:
   
   • A critical illness can prevent you from working, leading to lost income. The payout can cover living expenses, medical bills, or mortgage repayments during this time.

1. Protection for Your Mortgage and Family:
   
   • Helps ensure you can continue making mortgage payments or other essential costs without dipping into savings or causing financial strain for your family.

1. Flexibility in Use of Funds:
   
   • The payout can be used for anything you need, such as private medical treatment, home adaptations, or simply easing financial burdens.

1. Reduced State Support:
   
   • Government assistance may not be sufficient to maintain your standard of living during an illness. Critical illness protection bridges that gap.

1. Peace of Mind:
   
   • Knowing that you're financially prepared for the unexpected allows you to focus on recovery without additional stress..

 Income protection insurance is a policy designed to replace a portion of your income if you're unable to work due to illness, injury, or disability. It provides regular payments until you recover, retire, or reach the end of the policy term, depending on the plan.

1. Coverage Amount:
   • Typically covers up to 50–70% of your gross income.

1. Payment Duration:
   • Short-term policies: Pay out for a set period (e.g., 1–2 years).
   • Long-term policies: Continue until you’re able to work again or the policy ends.

1. Waiting Period:
   • Payments start after a pre-agreed waiting period (e.g., 4, 8, 12, 26, 36 or 52 weeks).

Note: It’s essential to review the specific conditions covered by your policy, as each insurer’s definitions and terms can differ.

1. Protects Your Income:
   
   • Your income is one of your most valuable assets. Income protection ensures you can maintain your lifestyle if you’re unable to work.

1. Covers Living Costs:
   
   • Helps with essential expenses such as mortgage repayments, rent, utility bills, and everyday living costs.

1. Provides Long-Term Security:
   
   • Unlike some benefits from employers or the government, which may be limited in duration or amount, income protection offers ongoing support for as long as you need it (subject to policy terms).

1. Peace of Mind During Recovery:
   
   • Reduces financial stress, allowing you to focus on getting better without worrying about how to pay the bills.

1. Versatile Coverage:
   
   • Unlike critical illness cover, which pays out only for specified conditions, income protection supports you for a wide range of illnesses or injuries that stop you from working.

• Self-Employed Individuals: No sick pay from an employer to fall back on.
• Primary Earners: Protect your family’s financial stability.
• People with Financial Commitments: E.g., mortgages, loans, or dependents relying on your income.

 Family Income Benefit (FIB) insurance is a type of life insurance designed to provide regular income payments to your family if you pass away during the policy term. Instead of paying out a lump sum (like traditional life insurance), it offers your beneficiaries a steady income for the remaining term of the policy. 

1. Policy Term: You choose the length of the policy and the amount of monthly income your family would need.
2. Payout: If you pass away during the policy term, your family receives monthly payments for the rest of the term.
   • For example, if you have a 20-year policy and pass away 10 years into it, your family would receive payments for the remaining 10 years.

1. Financial Stability: It ensures your family has a steady income to cover everyday expenses, such as mortgage payments, bills, school fees, or groceries.
2. Affordable Premiums: FIB insurance often has lower premiums than policies that offer a lump sum because the insurer’s liability reduces as the term progresses.
3. Ease of Budgeting: Instead of a large lump sum, which can be challenging to manage, your family gets regular income, mirroring a salary replacement.
4. Tailored Coverage: You can align the policy term with key financial milestones, like paying off a mortgage or your children reaching adulthood.

You might consider FIB insurance if:

• You have dependents who rely on your income.
• You want an affordable option to provide financial support.
• You prefer income payments over a lump sum for better budgeting.
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It’s particularly useful for families where ongoing expenses are a concern rather than one-time costs. However, if you need flexibility or a larger amount for immediate use (e.g., settling large debts), you may want to combine FIB with other types of insurance.

 Relevant Life Insurance is a tax-efficient life insurance policy designed for business owners, directors, or employees. It allows businesses to provide death-in-service benefits to employees (including directors) while enjoying potential tax advantages. The policy is owned and paid for by the employer but benefits the employee’s family or chosen beneficiaries.

1. Policy Ownership: The employer sets up and owns the policy but names the employee's family or beneficiaries as recipients of the payout.
2. Payout: If the insured person dies during the term, the policy pays a lump sum to the beneficiaries.
3. Tax Efficiency:
   • Premiums are typically treated as a business expense, so they may be tax-deductible for the company.
   • Premiums are usually not treated as a benefit in kind for the employee, so they don't incur personal income tax or National Insurance contributions.
   • The payout is made tax-free to the beneficiaries, provided it’s placed in a discretionary trust.

1. Tax Benefits: If you're a company director or small business owner, relevant life insurance is a more tax-efficient way to get life cover compared to paying for a personal life insurance policy out of post-tax income.
2. Provide Employee Benefits: Employers can use it to offer valuable death-in-service benefits to employees, enhancing workplace benefits without establishing a group life scheme.
3. Tailored for High Earners: It’s ideal for employees or directors who exceed their pension lifetime allowance, as payouts from relevant life insurance don't count towards pension limits.
4. Flexible for SMEs: Smaller businesses that can’t justify a group life insurance scheme can use this policy to protect individual employees.

You might consider Relevant Life Insurance if:

• You’re a company director or owner who wants personal life cover through your business.
• You want tax-efficient protection for your family.
• Your business wishes to provide employees with life cover without the costs of a group policy.
• You’re a high earner concerned about pension lifetime allowance limits.

This policy is particularly beneficial for small to medium-sized businesses, self-employed individuals with incorporated businesses, and those seeking to balance personal and business financial planning.

Executive Income Protection is a specialised insurance policy designed for businesses to provide income protection for key employees or company directors. It ensures a replacement income if the insured individual is unable to work due to illness or injury. The policy is typically paid for by the employer and offers both business and personal benefits.

1. Policy Setup: The employer takes out the policy and pays the premiums.
2. Cover Provided: If the insured person is unable to work due to illness or injury, the policy pays out a percentage of their income. This can include:
   • Salary: Replacement of a portion of the insured's regular income.
   • Dividends: Cover for directors whose income includes dividends.
   • Additional Benefits: Some policies can also include National Insurance contributions, pension contributions, and other benefits the company might provide.

1. Payout: The benefit is paid to the business, which then forwards it to the employee (often via payroll), ensuring continuity of income.

1. Protect Key Individuals: If a key employee or director becomes unable to work, the policy ensures they have an income while recovering, reducing financial stress.
2. Business Continuity: For directors or small business owners, this type of policy protects both personal income and the business, as the payout can help sustain cash flow or fund temporary staff to cover the insured’s role.
3. Tax Efficiency: Premiums are typically tax-deductible as a business expense, and benefits paid to the employee are subject to standard income tax, not additional penalties.
4. Flexible and Tailored: Unlike standard income protection, this policy can be customized to reflect the insured’s total remuneration, including salary, dividends, and employer contributions to pensions.
5. Enhanced Employee Benefits: Offering executive income protection as part of a benefits package helps attract and retain high-level employees.

You might consider Executive Income Protection if:

• You’re a company director or key employee whose income includes a mix of salary and dividends.
• Your business wants to safeguard against the financial impact of a key person being unable to work.
• You’re looking for a tax-efficient way to provide comprehensive income protection.
• Your business depends heavily on one or two individuals for its operations and success.

This type of insurance is particularly valuable for small to medium-sized businesses, companies with key employees, and self-employed individuals running incorporated businesses. It ensures financial security for both the employee and the business during challenging times.

 Redundancy Insurance, also known as Unemployment Insurance or Income Protection for Redundancy, is a type of insurance designed to provide financial support if you lose your job due to redundancy. It typically pays out a percentage of your salary for a set period, helping to cover your living expenses while you look for new employment.

1. Coverage: If you're made redundant, the insurance policy pays out a percentage of your monthly salary, typically between 50% and 70%, for a predetermined period.
2. Waiting Period: Most redundancy insurance policies have a waiting period before payouts begin. This can range from 30 days to a few months, depending on the policy.
3. Claiming: To make a claim, you'll typically need to prove that you’ve been made redundant.

• Lost Income: The policy provides regular payments to replace part of your income if you’re made redundant.
• Debt and Bills: It can help you cover your mortgage, rent, bills, and other essential expenses until you find a new job.
• Support During Transition: The payouts can ease the financial pressure while you search for new employment, allowing you time to transition without the stress of immediate financial hardship.

1. Financial Security During Job Loss: Redundancy insurance ensures that you have a safety net if you're unexpectedly laid off. It provides financial stability while you focus on finding a new job.
2. Protection for Unexpected Circumstances: Economic downturns, company downsizing, and restructuring can all lead to redundancies. This insurance helps protect against the financial consequences of losing your job through no fault of your own.
3. Peace of Mind: With redundancy insurance, you don’t have to worry about how you’ll cover your living costs while looking for a new role. It offers reassurance that you have time to find a suitable position without immediate financial stress.
4. Complementary to Other Benefits: If you're not eligible for unemployment benefits (e.g., because you're self-employed or have been out of work for too long), redundancy insurance can fill that gap.
5. Reduces Financial Strain: If you're a single-income earner or have a family to support, redundancy insurance helps maintain your financial commitments, such as paying bills and other regular expenses.

You might consider redundancy insurance if:

• You’re in a job where redundancy is a possible risk (e.g., working in a volatile industry, small company, or in a role where layoffs happen regularly).
• You don’t have a significant savings buffer to cover your living costs in case of unemployment.
• You want additional peace of mind in case you lose your job through no fault of your own.
• You rely on your income to meet key financial commitments, such as paying a mortgage or supporting a family.