Denise Saunders
Review Your Insurance Policies
One of the questions clients sometimes ask their advisers is, “What insurance policies do you have?” Now everyone’s needs and attitude to insurance are different so the package outlined here may not suit you. But it does provide pointers to the package which you should be thinking about.
This is the insurance package put in place for one of our advisers with a mortgage. They have a joint lives, first death insurance policy to pay off the mortgage should either of them die. They both have critical illness policies with smaller limits to keep the cash flowing until the income protection policies kick in after three months. It is possible that they might have an illness which is not covered by a critical illness policy, so they have taken a chance on that.
His wife does not work so she has a house person’s policy instead of an income protection policy. Hers will pay out an increasing monthly tax free sum, potentially until she is sixty, if she cannot perform two or more her normal house person’s and parental functions, including driving. His income protection plan will do likewise if he cannot perform his normal work functions, again until he is sixty.
They also have family income protection policies which will pay out a monthly tax free sum to age 60 if either of them dies prematurely. This is so at least some of the income lost by his death can be supplemented by the insurance policy. If his wife were to die he would have the choice of using the extra income from her policy to pay for after-school clubs or to work a shorter day to pick up the children from school.
The final part of the package is a relatively large joint life, second death insurance policy written in trust for the benefit of the children. The premiums are only £15pm. This should provide the children’s guardians with sufficient cash to bring up the children and a lump sum to help them in their early adult life.
You should always check the fine print of insurance polices so you fully understand what you are buying, or more importantly what is excluded.
Leaving your family’s security unprotected is a risky option. You should at least be aware of the cost of transferring the risk to an insurance company so that you can make measured decisions.
To review your insurance policies contact Langtons today for a no charge or obligation review.