Life Assurance

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There are various types of insurance policies kicking around in the market. We feel it is important to provide a definition of each type of policy first and foremost. It is very easy to simply buy a product off the shelf without really knowing what you are buying:

Life assurance or life insurance - Will pay a tax free lump sum should you die within the policy term. This would be paid to dependents or your estate in order to clear your mortgage, without having to sell the house.

Critical illness - Will pay a tax free lump sum to you on diagnosis of a critical illness, such as cancer, stroke, heart attack, Multiple Sclerosis etc. This is a benefit that will enable you to clear your mortgage on being diagnosed with a critical illness and will prevent you from having to lose your home. The monies may instead by used to help fund carers if needed or just enjoy as the majority of people who suffer a critical illness make a 90% - 100% recovery.

Income protection - will pay a monthly benefit to you, should you be unable to work due to accident or sickness, I have left a deferred period of 6 months as I would hope that your employer would offer your 6 months pay at which point it would revert to the £96 per week you receive from the Government. You would receive the monthly benefit for a maximum of 25 years, however if this happened 5 years into your policy it would pay for a maximum of 20 years etc.

Redundancy cover - will pay a monthly benefit to you should you be made redundant, it will pay out for a maximum of 52 weeks and thus should give you time to get back into work.

When looking at an insurance policy it is obviously important to look at the monthly cost of the mortgage but it is perhaps more important to look at the payout histories of the providers, there is little or no point of taking out an insurance policy if you only have a 50/50 chance of payout. We look at the providers that offer payout in over 90% of claims made so that your chances of becoming “one of those stories” is less likely.

We would always say don’t purchase through a supermarket or bank, they have access to one particular insurance so the policy has a strong chance of being below what you may expect.