Life and protection insurance policies protect you and your family from the financial consequences of death, a serious accident or illness, and unemployment.
Providing Essential Information on Mortgage Protection
Protect yourself, you’re home, and you’re finances with our comprehensive Mortgage Protection options.
Our team always advise for obtaining some form of mortgage protection, as it’s always best to prepare for the unexpected. We will provide advice and make a recommendation based on your needs and budget.
We serve clients throughout Yorkshire & Teesside and we’re happy to discuss a consultation whenever you’re ready.
The Value of Protection
Far from being a luxury, protection Insurance should be considered essential, especially if you have a family or people that rely on your income. If you suffered a serious illness or injury, you may lose your income. This could lead to you losing your home. Similarly, if you died, your loved ones may be unable to maintain their current lifestyle without your income.
With the right level of life and protection insurance, you may be able to:
- Pay off your mortgage.
- Maintain your or your family’s lifestyle.
- Pay for replacement childcare.
- Cover school or university fees.
- Pay for specialist nursing support.
You may already have life and protection insurance in place, but it’s still worthwhile to review your current cover levels. Personal circumstances can change regularly so it’s important to ensure your level of cover is appropriate.
Income Protection Insurance
Income protection insurance pays out a regular tax-free replacement income if you become unable to work because of illness, injury or, with certain policies, unemployment. It could help you keep up with your mortgage repayments and other living costs until you’re able to return to work.
Policies have a waiting period before they pay out, which begins when you become unable to work. The longer the period chosen, the lower your premium. It’s a good idea to find out what your employer would pay you, and what state benefits might be available so you can choose an appropriate waiting period.
The premium that you pay varies, depending on your age, health and job, as well as the level of income you wish to protect. If you become ill or suffer an injury during your working life, an income protection policy helps to protect against any possible loss of income, and speed your return to work.
Critical Illness Insurance
Critical illness insurance pays out a tax-free lump sum on the diagnosis of certain life-threatening or debilitating (but not fatal) conditions, including heart attack, stroke, cancer and major organ transplants. This list will vary depending on the insurer, as will the exclusions for making a claim.
This type of insurance often comes as an optional addition to a life insurance policy, but can also be purchased on its own. Policies usually only pay out once, so they don’t necessarily replace your regular income, but you can use the money towards medical treatment, your mortgage, or anything else you choose.
Many people buy critical illness insurance when they take on a major commitment, like a mortgage, or start a family. However, since we’d all like to have our financial commitments lightened if we were to suffer a serious illness or injury, the cover is relevant for most of us at any time. If you already have critical illness insurance, you should think carefully before you cancel your existing policy and take out a new one.
For example, if you’ve developed any illnesses since you first took out the policy, you may lose some of the benefits when you replace it. That’s because pre-existing medical conditions may not be covered by the new policy.
Life Insurance (sometimes known as Life Assurance) helps provide financial security for people who depend on you, should you die. Although money can’t replace a loved one, it can help those left behind to weather the financial storm. For example, it could pay off the mortgage or provide an income to help cover regular household expenditure.
Types of Life Insurance
There are different types of life insurance – the most appropriate type for you will depend on your circumstances. Life insurance will pay out either a single lump sum (sum insured) or a regular income when you die.
Term Insurance – This is the simplest type of life insurance. You choose how long you’re covered for, – e.g. 20 years (the term) – and the policy pays out if you die within the agreed term. You can also take out term cover as a couple, with the policy paying out on the first death only during the term. There are several different types of term policy available, depending on your needs.
Family Income Benefit Insurance – This is essentially the same as term insurance, but instead of paying a lump sum when you die, it will pay out a regular income instead. This type of payment may be more suitable where the main purpose of the policy is to provide ongoing financial support to dependants.
Whole of Life Insurance – This pays out a lump sum when you die, whenever that is, as long as you are still paying the premiums.
Payment Protection Insurance
The plan will have no cash-in value at any time, and will cease at the end of the term. If premiums are not maintained, then cover will lapse. Payment protection insurance and short-term income protection insurance can provide a monthly income to help cover your regular outgoings. It’s crucial if you can’t work due to an accident, illness/injury or, often as an optional extra, unemployment.
There are important differences between these products, and income protection insurance. They include a limit on how long the replacement income will be paid for – usually between 12 and 24 months. By contrast, income protection insurance will pay out for as long as you are unable to work (up to the policy expiry). Unemployment cover is often an optional extra on these policies, or can be purchased as standalone cover.
Payment protection insurance is optional. There are other providers of payment protection insurance and other products designed to protect you against the loss of income. For impartial information about insurance, please visit this website.
Listen to our Podcast
Our Latest Podcasts
Mark Thompson, equity release specialist, joins Craig on the Mortgages, Money & More podcast to discuss some new trends in the equity release space. There’s