Life Assurance provides money for those people who may depend on you financially, in the event that something should happen to you. It can provide the reassurance of financial protection for you, your family and/or your business associates.
There are many different types of protection policies available, from protecting a mortgage, an income, a key worker, a shareholder or a business loan. With so many unique and innovative features within these plans, it can be a difficult to know where to start which is why it is always wise to take advice from the experts.
Mortgage & Family Protection Plans
Protection plans can be paid as a lump sum or an income in the event of death, critical illness and/or total permanent disability.
They are usually taken out to protect your mortgage and/or financial dependants and the sum assured can either remain the same throughout the term or decrease.
These products have developed considerably over the years and many offer innovative features such as fracture cover, serious illness cover and access to healthy living rewards programmes which can help reduce the premiums each year.
Income Protection
Income protection insurance can give you and your family an important financial buffer to help cover your lifestyle and outgoings, i.e. your mortgage repayments, if you cannot live off savings or any sick pay the government, or your employer may provide.
Whether you’re sick or physically impaired and cannot work, income protection insurance is designed to cover as much of your lost earnings as possible thus allowing you to focus on your health without the added worry of the loss of your income.
Income protection policies require a monthly premium to remain active and will (subject to policy specific terms) only pay out in the event of illness, accident or unemployment forcing you out of work. These pay-outs are tax-free and designed to help you maintain your existing standard of living, including covering bills such as mortgage or loan repayments, utility bills, etc.
Shareholder and Keyman Insurance
If you have a significant share in a company, a shareholder protection plan may be essential to help your business to continue trading if it suddenly loses a shareholder or partner of the business. These arrangements enable the remaining business owners to buy out the interest of a critically ill or deceased business partner.
Without a shareholder or protection plan in place, a limited company, partnership or limited liability partnership share could be passed on to a beneficiary with little or no experience of running such a business.
There are also Keyman Insurance plans which provide protection and reassurance to businesses should key people within the company be unable to work through either serious illness or death. These events can have a serious impact on the structure and/or profitability of the business which these policies can help alleviate.
Business Loan Protection
If your business has outstanding loans, such as a commercial mortgage, overdraft or a venture capital loan, business loan protection can act as a vital safety net, repaying your lenders in the event you or your business partners die or are diagnosed with a critical illness.
For most start-ups and growing businesses, it could be difficult to repay sizeable business loans at short notice if the business owner were to pass away. Business loan insurance is designed to pay out a lump sum to cover the cost of loan repayments and allow your business to operate as normal should the unexpected happen.
Relevant Life Plans
Ideal for businesses looking to provide top-up benefits to an existing group life scheme, or offer death-in-service benefits to specific employees and salaried directors.
Relevant life cover is being increasingly used by small businesses to attract and retain highly experienced employees as part of an attractive benefits package. The policy pays out a tax efficient lump sum amount in the event of the death or diagnosis of a terminal illness of the employee insured. This sum goes directly to your employee’s family or financial dependants.
Redundancy Cover
Redundancy cover, also known as unemployment insurance, is designed to pay out a tax-free monthly income to you in the event you unexpectedly lose your job. Whether you’re concerned about safeguarding your mortgage repayments or simply maintaining your existing lifestyle, redundancy cover can help to remove any financial fears and allow you to focus on finding a new job.
This is a specialist type of insurance that can supplement a sizeable percentage of your previous gross monthly income for a set timeframe, often for up to 12 or 24 months.
There are other providers of redundancy cover, also known as short-term income protection and other products designed to protect you against loss of income.
For impartial information about insurance, please visit the website at www.moneyhelper.org.co.uk
