What different kinds of Protection are available to me?
Why do you need Protection?
If you were to pass away your family may struggle to maintain their lifestyle or meet mortgage or rent payments at a time of great emotional strain. A financial adviser in Truro can help you find the right life cover to suit your needs.
There are a variety of covers depending on your needs. Life insurance can pay out a lump sum or a regular tax free income if you die.
Life insurance is typically used to protect your family, your business or a creditor and may be used in conjunction with a mortgage or inheritance tax planning. There are tax-efficient plans for small businesses and a plan called Gift Inter Vivos which covers the inheritance tax due on a gift above the nil rate band.
A Truro financial advisor can help you understand the options available with Income Protection.
Protect Your Income
Want to protect yourself against the biggest financial risk you’ll be exposed to? Imagine being out of work for a few months or more because of an illness or accident. If one these strikes you’ll be able to maintain the home and lifestyle you’ve worked hard for.
In an ideal world, income protection and critical illness would be taken out together as each one protects you against a different risk. The benefit paid under a critical illness claim can pay off a mortgage or other debt but what about your ongoing commitments, like utility bills and other regular outgoings?
Income protection is typically more expensive because you are far more likely to suffer a less serious condition, like back problems or stress.
Short Term Income Protection
This is a watered down version of an income protection plan usually only paying out for a fixed time period, typically 12-24 months. This type of policy may be useful as a starting point when you’re starting out on the property ladder and finances are a bit tight to afford an income protection plan. Speak to a financial adviser in Truro for help.
Critical illness insurance
This type plan is usually purchased as an additional cover when taking out life assurance although there are standalone plans available. Whilst life cover will protect your loved ones if you die, Critical Illness will provide financial support to you and your family or business if you were diagnosed with a critical illness. Imagine if you lived in Truro or Cornwall and were unable to return to full health; how would this impact your financial situation?
A financial adviser can help guide you through the process to identify the best options to meet your budget.
Most insurers cover the ABI’s standard conditions and usually cover conditions over and above this level.
Serious Illness Cover
This was originally conceived in South Africa as an improvement to Critical Illness cover. For most conditions, a typical critical illness policy would give you a payout for your full cover amount, or nothing at all.
This can leave you with nothing to help you cope with an illness that’s having an impact on your life. Serious Illness policies generally work differently by paying out a percentage of your cover, up to 100% depending on how severe your condition is. This can mean that they pay out on a wider range of illnesses, not just the debilitating or life-threatening ones covered by typical critical illness policies. A financial adviser can help you by identifying your needs and matching that to the right insurer. Speak to one in Truro to see how they can help you.
Whole of life insurance
This is a life assurance policy that you pay premiums on until the day you die or decide you no longer wish to pay the premiums. It’s very common nowadays for the premium to be guaranteed not to increase and for you to know exactly the amount that would pay out on your death.
This type of life insurance is extremely useful in Inheritance Tax planning (when used alongside appropriate trusts) but can also be used to provide a lump sum to leave to your client’s family or for the repayment of outstanding debts. A useful financial tool. An advisor in Truro will be able to identify if this would be beneficial to you.
Pensions and investments are risk-based products. This means that the value of your initial investment and any income generated can fall as well as rise. If you are in any doubt we highly recommend that you seek financial advice when deciding which options are the best for you.
To learn more about Pensions click here
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