Family Protection
Financial planning is about ensuring that the needs of you and your family are addressed in the most cost effective and tax efficient way.
These may include funding your children through education, helping them to buy their first home as they establish financial independence and looking forward to your own long, healthy and financially secure retirement.
A lot of these events can be planned for, with specific dates in mind. But we also need to plan for unwanted or unexpected events that could throw our plans off course such as redundancy, sudden illness or premature death.
Building up savings and cash reserves can provide a cushion for a certain period of time. You may also choose to direct any excess income towards repaying debt to keep your liabilities to a minimum.
In addition, there are a number of cost effective protection products that can provide a tax free lump sum or supplementary income upon certain events.
Life Insurance
Life insurance (also known as life assurance or life cover) helps to ensure your dependents are financially protected with a payment made in the event of your death.
This payment can be used to repay outstanding debts, such as a mortgage, or to help replace your income in the event of your death.
There are different reasons for needing life cover which will determine the type of life insurance policy we recommend:
Mortgage Life Insurance
If you have a repayment mortgage you can arrange a mortgage life insurance policy. This keeps the costs as low as possible because the sum assured automatically reduces as you repay your mortgage. If you have an interest only mortgage you can purchase a level term assurance policy. With this form of life cover, the sum assured remains the same throughout the term of the life insurance policy.
Family Life Cover
You can arrange a level term assurance policy to pay a fixed amount to your dependents in addition to your mortgage amount. This could be used to repay other debts or to provide an income for your family to live off. You may prefer the sum assured to be paid as a regular income by the life insurance company rather than a lump sum. This is known as Family Income Benefit and is one of the lowest cost forms of life insurance. With this type of life cover, the income is paid from the time of claim until the date the life insurance policy was due to end.
Income Protection
There are also products available to protect you and your family in the event of illness, such as Critical Illness insurance and Income Protection plans. These can be geared to fit around and supplement any sickness benefits due from your employer.
Advice, then price!
Our advisers will provide advice on the optimum level of cover and the type of policy that best meets your needs. We will also select the most suitable contract from the major product providers and can assist you in applying for the cover.
Our advice will also consider the tax treatment of the premiums you pay as well as the impact on the policy benefits. It is worth considering that proceeds from a life insurance policy are added to the deceased’s estate, which could lead to a potential Inheritance Tax liability. This can be avoided through careful planning and the use of Trusts.
Whilst the price of products is always important, it can be far outweighed by the potential value of selecting the most suitable product and establishing the policy in the most tax efficient way.
When it comes to protecting your long term finances and the welfare of your loved ones, personal advice from a trusted, qualifed adviser is invaluable.
Interested?
Click here to request more information or to arrange a personal consultation.
More information on Inheritance Tax is available by clicking here. |
