Life has a way of throwing unexpected circumstances our way. Whether that comes in the form of unemployment, illness or bereavement, it can cause excessive stress. When you have financial burdens, such as mortgages, to consider, this can be exacerbated. There is an option available, though, to lessen the blow should the unexpected happen. Our suite of insurance products will help protect you in your time of need. Here we’ll give a short description of each of the protection products we have available. To find out more about any of them, contact our team.
Life insurance
Life insurance protects your loved ones in the event of your death. A tax-free lump sum can be paid out, lessening the financial impact of your death. Alternatively, you can choose for regular payments to be made. There are a number of types of life insurance policy available, including ‘term’ and ‘whole life’ policies. ‘Term’ life insurance policies will only pay out if you pass away within the policy’s term. A ‘whole life’ policy pays out as long as you continue making payments towards the policy.
Why should you choose a life insurance policy?
Life insurance policies will ease financial pressures on the loved ones you leave behind in the event of your passing. It can offer them peace of mind in an otherwise stressful time. Life insurance policies may pay off your outstanding mortgage balance, help cover financial expenses and clear other debts, depending on the level of cover offered with your policy.
Why may you not require life insurance?
If you are single with no dependents, you may not have the requirement for life insurance. Some employers offer a form of life insurance as an employee benefit, so you may not require additional cover. However it is possible to have more than one active policy should you wish to.
Critical illness cover
Should you be diagnosed with a serious medical condition, for example a heart attack, Alzheimer’s disease or a stroke. Critical illness cover will pay out a lump sum, tax-free. Your policy will state which illnesses are covered by it and there are some common exclusions.
If a serious illness impacts your ability to work, your employer may have a limit on how long they are able to pay sick leave for. Though you may be entitled to Statutory Sick Pay, this may not cover your household’s outgoings. A Critical Illness Cover payment may help to ease the financial burden on you.
Generally, critical illness cover continues for as long as payments are made. Following a pay-out, the policy will cease. Your pay-out could be used to take care of household bills, as well as any modifications required to your home as a result of your illness.
Why may you not require Critical Illness Cover?
If you have savings or other forms of income that would not be impacted by your illness, you may not need this cover. This would be the case if your savings or additional income are sufficient to cover your outgoings. If you do not have anyone else relying on your income, you may not be as concerned about a potential financial burden. Those with low financial commitments may also not have a need for this cover.
Family Income Cover
Family Income Cover is a form of life insurance, in that a pay out will be made to loved ones on your death. They will not receive a lump sum. Instead, payment is made on a monthly basis for the term of the cover. In this way it can replace the income for your family and household that your were bringing in before you passed. Depending on when in the policy duration a claim is made, will determine how long monthly payments will be made for. For example, with a 15-year term policy, in the sad occurrence of your passing after 10 years of paying in to the policy, payments will be made for the remaining 5 years.
Who would benefit from Family Income Cover?
Family Income Cover is designed for those with dependents including children and spouses. This form of cover is a great way to gain peace of mind that your loved ones will have financial security in the event of your death.
Income Protection
Income Protection is an insurance that covers you if you are unable to work for a time due to sickness or disability. These policies pay out on a monthly basis to replace the income you would have received if you were in work. It will pay out a proportion of your monthly income, for example 50%. You are usually able to claim on your policy multiple times during the term. Many illnesses are covered by income protection that may leave you unable to work. This protection should not be confused with Critical Illness Cover. The latter a one-off lump sum as opposed to the monthly payments offered by an Income Protection Policy.
With each of these insurance policies there are multiple options available. The team at Bell Mortgage Solutions will discuss your requirements with you. We’ll find the right policy for you that best suits your needs. Contact us now to book an appointment.
The information contained within was correct at the time of publication but is subject to change.
Please note: Your home may be repossessed if you do not keep up repayments on your mortgage.
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