LIFE INSURANCE Not everyone needs life insurance. However, if you have dependents who rely on you to cover the mortgage and other living expenses, then it really is something you might seriously consider. Monthly premiums vary depending on individual circumstances, and our advisers can support you in choosing the most appropriate level of cover and type of policy. Who do I need to speak to? You can contact us and speak to our protection specialist at your convenience. 01302 866787 or send us an email at info@dragonflyfs.co.uk
Why Do I Need Life Insurance?
It’s not always easy to think about and talk about unexpected shocks and events with our loved ones. However, it’s crucial to think about what would happen if you were no longer around. Would your family be able to:
• Pay your outstanding mortgage
• Pay for funeral expenses
• Be able to cover childcare costs
• Meet day-to-day family living costs
• Clear any outstanding debt in your name
• Provide a nest egg/ inheritance for your loved ones
A life insurance policy provides a tax-free lump sum upon death. The money received from a life insurance policy pay out can be used for whatever the beneficiary deems fit.
When Should I Get Life Insurance?
The sooner, the better! The younger you are, the more favourable the premium (cost per month) is likely to be. Major life events are always a good time to review your protection requirements, such as:
• Getting married
• Having children
• Obtaining a mortgage
• Losing a loved one
• A change in relationship status
• A change in employment status
(especially if cover has been part of a benefit package)
Will I be Able to Get Life Insurance?
The exact cost of life insurance depends on the individual and takes into account:
• Age
• Health & lifestyle
• Smoking status
• Sum assured (how much you would like the lump sum to be)
• Type and length (term) of cover
What Happens if I Outlive the Life Insurance Policy?
If your cover is a term-based policy (for example, taken out for 25 years in line with your mortgage or until a fixed age such as 65) and you outlive it, your policy WILL NOT result in a payout being issued. The cover will cease at the end of the policy, and there will be no monies paid out/ paid back.
CRITICAL ILLNESS COVER
Critical Illness Cover is a long-term policy which covers specific serious illnesses and can relieve the financial burden during a stressful and often traumatic time. Depending on the terms of your individual policy, if you are diagnosed with one of these illnesses, the policy can provide a lump sum benefit to the policy holder.
The types of illnesses covered will be set out in the details of the policy, so it's important to be fully aware and ensure it covers your needs. Monthly payments will depend on a range of factors such as age, whether you are a smoker/ non-smoker, your current health, family health history, and in some cases your occupation.
Why Do I Need Critical Illness Cover?
You may want to consider critical illness insurance cover if:
you would not be able to cover your monthly outgoings in the event of a critical illness diagnosis & being unable to work
your employer doesn't offer adequate cover
you don't have enough savings to cover such an event
the current statutory sick pay wouldn't be enough to cover your weekly/monthly outgoings
you have dependents who rely on your income
Our advisers can discuss your requirements with you to ensure you choose the most appropriate level of cover for your individual circumstances.
How Much is Critical Illness Insurance?
The cost of your monthly premiums (payments) will depend on your individual circumstances. The insurance provider will decide how 'high risk' you are in terms of how likely you are to become ill during the term of the policy. A range of factors will be taken into consideration such as:
your age
smoker status (including e-cigarettes)
pre-existing medical conditions
personal history of illness
family history of illness
your job
the length of your policy
the level of cover
*NON-DISCLOSURE can result in claims being invalid*
How Much Critical Illness Insurance Cover Do I Need?
This depends on your individual circumstances, which is why it's worth seeking advice from a protection specialist.
Ask yourself, what do I need to cover?
mortgage/ rent payment
weekly/ monthly household bills
general provision for your loved ones
additional medical costs/ adaptations to the home
• additional debt
Are children covered on critical illness insurance policies?
Some policies do cover children -this is something to highlight with your adviser when you are exploring your options.
INCOME PROTECTION INSURANCE
Income protection insurance is a policy that is designed to support you by providing a monthly payment if you are injured or ill and can’t work.
It pays a proportion of your lost earnings (generally 50%-60% of your salary), which can help to cover your monthly bills and outgoings.
What is a Deferred Period?
The deferred period is the time between the first day you are unable to work and the day your benefit starts. A deferred period is useful as you may not need the money straight away as you may receive sick pay from your employer or claim statutory sick pay from the government for a set period of time. You usually have to wait a minimum of four weeks, but payments can start up to two years after you stop work. You can choose from different deferred periods, for example, 8, 26 or 52 consecutive weeks. Usually, the longer your deferred period, the cheaper your premium may be. Income protection insurance policies are based on personal circumstances, and we highly recommend seeking advice from a protection adviser to ensure you are considering all available options.
Do I need Income Protection Insurance?
It is important to think about how long you could manage financially if your income was stopped or reduced due to illness or injury preventing you from being able to work. If you and your loved ones rely on your income to cover regular costs such as mortgage payments, utility bills, food, fuel and day-to-day living expenses, it is certainly worth considering purchasing an income protection policy. It is important to note that you won’t get any money back if you never make a claim.
What Will I Have to Disclose to Purchase Income Protection Insurance?
You must disclose any pre-existing medical conditions, and details of your family’s medical history. You must also disclose any extreme or dangerous hobbies or lifestyle choices such as smoking, heavy drinking or drug use. If you do not disclose such information at the time of purchase, your insurer may refuse to pay out at the point of a claim.
What Affects the Cost of Income Protection Insurance?
• age
• occupation
• lifestyle & hobbies
• health
• deferred period
• cover amount
How Can I Purchase Income Protection Insurance?
Click here to give us a call, book an appointment or complete our contact form
to speak to one of our trusted protection advisers.