Protection Plans - Overview

The following is a brief guide to some of the different types of life cover and other protection plans available. Whilst it's important to have protection in some form, either to cover your mortgage or to protect your family, it's important that your protection is right for your needs, so please call us for a free, no obligation appraisal, from which we can recommend a tailored package of protection to suit your circumstances and budget.

Term Assurance

• Level Term - The amount of cover stays fixed for the length of the policy, and like all term assurance has no cash-in value. In the event of a claim a lump sum is payable.
  
• Decreasing Term - The amount of cover reduces over the term of the plan, although the premiums stay the same. This type of cover would most commonly be used to protect a mortgage, and is also known as Mortgage Protection 
  
• Renewable - This is very similar to level term, but carries a guarantee that at the end of the term you can take out another such contract
  
• Family Income Benefit - (FIB) this pays out a regular amount like an income, and is most suitable to protect a family in the event of a parent dying. It is a type of Decreasing Term Assurance plan, and one of its advantages is that it is relatively inexpensive

Whole of Life Cover

• These normally have some sort of investment element, and the aim of this type of contract is to provide a lump sum regardless of when you die
  
• The money you pay goes into a fund, and this fund is used to pay for the cost of the life cover 
  
• If the value of the fund is not enough to pay for the cost of the life cover, you will either have to reduce the level of cover or increase contributions 
  
• Such cover can be arranged to provide maximum level of life cover and therefore very little investment, and a balanced basis with a greater level of investment 
  
• This type of plan is commonly used to protect inheritance tax liabilities, with the plan placed in trust 
  
• If used for inheritance purposes then for a husband and wife it would be on a joint life basis, on the death of the second person, (joint life second death).

Critical Illness Cover 

• This type of cover is available either as a separate policy or as an additional option on a life cover plan.
  
• It is designed to provide a lump sum on diagnosis of a specified illness 
  
• Different providers cover different illnesses 
  
• It is often used to protect a mortgage 
  
• Cancer, heart attack and strokes account for the majority of claims on these type of policies 

Income Protection Plans

• This type of cover, although very different to critical illness cover provides protection in the event of illness.
  
• It pays a regular income which can be used to pay your normal bills if you are unable to work due to accident or injury.
  
• It pays out regardless of the illness, providing it prevents you from working.
  
• Insurers will restrict the maximum level of benefit based on your earnings 
  
• Unlike accident and sickness cover attached to mortgages which often pays out for only 1 or 2 years, this plan would pay out until the end of the term if you could never return to work.

Contact us now on 0870 190 4187 for your free, no obligation consultation.

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