Protecting those you love and yourself can be a costly business and there are a variety of different policies available that pay different amounts, at different times, depending on certain circumstances.
Dealing with an Independent Adviser who knows the differences between these arrangements and when and how they can be useful to you is extremely important. With years of experience in this market we believe Oakfield Financial Services Limited is ideally placed to help you insure yourself against some of the nastier things in life, whilst keeping the premiums within a budget that is affordable.
As Benjamin Franklin, the famous American Statesman once said ‘in this world nothing can be said to be certain expect death and taxes’. Whilst we can help reduce your taxes there is, unfortunately, nothing we can do to stop you dying. However, we can ensure that your financial affairs are set up in such a way that your family can survive financially without you.
Whilst there are numerous policies that can protect against death and other situations the majority are variations of the following basic contract contacts:-
Level Term Assurance (LTA) – Here one or two people can be insured for a specific period for a set amount, which remains constant throughout the lifetime of the policy. If the life assured dies during this period then a lump equal to the sum assured is paid out, by the insurance company.
Decreasing Term Assurance (DTA) – This is often known as Mortgage Protection and like Level Term Assurance covers one or two lives assured for a set period of time. However, the sum assured under this contract falls often roughly in line with the mortgage, over the period of the contract, thus the further into the contract before the life assured dies the lower the amount paid out.
Family Income Benefit (FIB) – This is a variation of Decreasing Term Assurance, whereby lives assured are covered for a specific period of time. In the event of a claim the sum assured is paid out as a monthly income from the date of death until the end of the policy. This type of policy is particularly useful in providing income to a family following the death of the main breadwinner.
Whole of Life – With this type of policy there is no end date to the contract, as such the contract will definitely pay out as it covers the life assured from the date the policy starts until they die.
Endowments – These policies combine both savings and life assurance over a specified term. In the event the life assured dies within the term of the policy a lump sum is paid out, but in the event that the lives assured live until the end of the term, unlike LTA, DTA and FIB, where nothing is paid out the endowment should pay out a lump sum.
Critical Illness Cover (CIC) - Critical Illness Cover pays out a lump sum when a life assured is diagnosed with a specific critical illness. Each insurance company has a long list of critical illnesses covered by its policy and providing the life assured suffers one of these illnesses the sum assured will be paid out. Critical Illness cover can be arranged on a stand alone basis or as an add-on to the five contracts listed above.
Income Protection – With this type of policy, again it is term based, normally until the life assured expects to cease work. The policy does not cover the life assured against death, but pays out a regular income in the event that the life assured cannot work. The policy normally has a deferred period, allowing for people who are short term sick to return to work without being allowed to make a claim. The longer the deferred period the cheaper the premium. After the deferred period if the claimant cannot return to work and the claim is accepted then a regular amount of income is paid to the claimant to the end of the contract.
Accident, Sickness and Unemployment Cover (ASU) - This contract covers three specific areas, as detailed in the name, however, it only pays benefit as a regular income and these are only for a short period of up to two years. Even if a claimant remains eligible to make a claim after the payment period then no further benefits will be paid.
The premiums for the various policies quoted above are dependent upon state of health as well as occupation and smoking habits. Premiums under the various contracts are in some instances guaranteed not to alter for the duration of the policy, whereas on other occasions may be reviewable. The policies may also include additional options such as waiver of premium, whereby the premiums are met by the insurer in the event the life assured is unable to work, due to sickness or accident. Terminal illness may also be added and here benefits are paid out if the life assured is diagnosed as having less than 12 months to live.
When recommending a particular contract we will explain our recommendation in writing, detailing why we have made such a recommendation and providing information about the contract and how it is appropriate to you.
To discuss your life assurance needs please contact us or telephone 01376 529800.
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