What would be the financial implications for those you care most about if you died tomorrow? Having the right protection in place is critical if you are to help your family maintain a reasonable level of lifestyle – a roof over their heads, food and clothes, holidays, running a car, club fees, and the list goes on.
It’s also important to make sure you have enough cover because over time your circumstances change and the number of people dependent on you may increase. Getting married, buying your first home with a partner, or having a child for example may all change your protection needs. Then factor in job changes, pay rises, house moves and perhaps an expanding family – all good reasons to keep your protection cover levels under regular review.
Uses for protection
Paying off a mortgage
You may want to guarantee there’s a roof over your family’s head. A life assurance pay-out can be used to pay off what is likely to be the biggest debt you and your family will ever have.
Paying off debts and loans
Free your loved ones from the burden of debt and unnecessary interest payments. The money can be used to pay off loans on cars, credit card bills, bank loans and more.
How much cover do you need?
It depends entirely on how much household income you need to replace should the worse happen, which is why it pays to work with a life assurance specialist to help you identify household expenditure, lifestyle expectations and the various options available.
How much will it cost?
It depends on factors including the amount of cover you need, for how long, your age, and the state of your health.
What are the options?
You could decide on a life assurance policy which pays out a tax-free lump sum should you die, or you could decide that a regular monthly income is a better choice. You can choose a set term after which cover ends, or cover throughout your life.
Life assurance throughout your life
A Whole of Life policy provides cover for the rest of a person’s life, so there’s no concern about cover running out after a set term.
Some policies pay out a tax-free lump sum and could be used to pay funeral costs, provide an inheritance, or form part of an inheritance tax planning strategy.
Others are investment-linked policies and are either linked to funds or with-profits policies, which offer bonuses. Pay-outs therefore are linked to fund performance and could be higher than the original level of cover.
Other ways to protect those you love.
Income Protection is a policy designed to pay-out an income should you be unable to work due to an accident or a long-term illness. Critical Illness Cover pays out a tax-free lump sum should you be diagnosed with a specified serious illness.
Knowledge and expertise
Professional advice is essential if you are to make an informed decision about what type of policy, what amount of cover and over what time-period is best for you. Our advisers can help you arrange the right solution to meet your overall protection and financial planning strategy.