How many people actually know what financial state their family will be in if the breadwinner dies unexpectedly?
This is even more pertinent if there are dependent children.
What is not widely known is that an inexpensive insurance called a family protection plan can take this risk away.
This insurance could not be simpler. You select a time period, say 20 years, and if you die within this period the plan pays a tax-free income to the spouse/partner for the remainder of the term.
The example below illustrates this perfectly.
Mr & Mrs Lumpkin are aged 35 and 29 and both are non-smokers. They have two children ages 3 and 7. The Lumpkin’s want to ensure that if one of them dies then the survivor receives a worthwhile income until the youngest child is age 21 (and presumably no longer dependent).
They believe that £1,250 p.m. is adequate.
Mr Lumpkin can obtain such a plan for £9.55 p.m. whilst Mrs Lumpkin pays £7.66 because she is younger.
So, for a combined £17.21 they can provide each other and their family with the financial security we all desire.
Easy answer because suffering from a critical illness such as cancer, heart attack, stroke, multiple sclerosis and over forty other illnesses will have a dramatic effect on your life.
The financial consequences cannot be underestimated. Imagine being hospitalised for weeks with a long recovery period.
- Will you still be paid?
- Who will run the house?
- Who will look after the children?
- Will your life change forever?
A critical illness plan provides a tax-free sum upon diagnosis of a named condition or upon undergoing certain treatments such as heart by-pass surgery or amputation of a limb. The money could repay or reduce your mortgage. It might be used to adapt your property or for specialist medical treatment. It could pay for convalescence or simply provide a comforting sum in the bank.
In the last eight years fourteen of our clients have received cash sums that has helped them out enormously. Contact us for details.
Every now and then a deadline comes along which focuses the mind.
This year two major events occur at around the same time. In December the EU Directive takes effect and insurers can no longer create different insurance costs for men and women. Whilst this is infinitely stupid and has no connection with logic it is, nonetheless, the law.
Also in December are changes to the way that insurers are taxed. As with all such changes it means that the tax haul is going up and because of this the insurers will be increasing the cost of insurance.
What Does This Mean
After December 21st 2012 the cost of life insurance, critical illness and income protection insurances will rise by up to 25%.
This represents a short opportunity to rearrange your insurances or otherwise fully insure yourselves before the cost rises sharply.