Protection

Why you need protection

Life can be unpredictable. No one knows what the future holds for them. Imagine how your
family would cope if you were to die prematurely or be diagnosed with a critical illness?

A life assurance protection plan can provide for your family if you die or become terminally
ill but the need for protection doesn't stop there. Advances in medical science mean that
where previously people died from all types of serious illnesses, such as stroke, cancer
and heart disease, more and more are surviving. And not just for a few months - often
several years.

Surviving a serious illness can have a big financial impact on you, your family
and your finances. Not only do you and your family need to come to terms with your illness,
but you still have the mortgage and all those other household bills to pay. And if you're
off work, you may not have a salary coming in each month.

While many of us recognise the need for protection should we die prematurely, we often
overlook the fact that we also need protection should we live.

Income Protection

We all take so much for granted; the fact that we take out insurance policies on cars, homes and holidays is a given, and the majority of people also take being able to work and look after their family for granted too.

During your lifetime on a salary of £25k per annum, you’re likely to earn £1.89m between the ages of 25 – 65, an asset most people leave unprotected.

So, what would you do if through accident or illness your income was cut by 75%? By taking out an Income Protection plan you’re creating security for you and your family should the unfortunate happen.

We believe that Income Protection should be the cornerstone of your financial plan and can help you review your contract of employment and work out what essential expenses to cover on a monthly basis.

Here are some crucial facts:

  • Over 2.5 million people will be off work at any one time through sickness or disability and will stay off work for at least 6 months*
  • People are 19 times more likely to be off work for more than six months due to illness or injury than they are to die before the age of 65**
  • In the first three months of 2010 18,504 mortgage possession claims were issued***
  • 4 million people are claiming Income Support****

*source Daily Telegraph 24/3/2010

**source Department of Work and Pensions

***source Ministry of Justice statistics bulletin 13/5/2010

****source Office for National Statistics

Main types of financial protection cover

  • Life assurance - Typically providing a lump sum upon the death of the life assured
  • Income protection insurance (IPI) - Providing a regular income when the insured is unable to work due to accident or illness
  • Critical illness cover (CIC) - Providing a lump sum if the life assured is diagnosed as suffering from one of the listed critical illnesses
  • Mortgage payment protection insurance (MPPI) - Providing a regular income to cover mortgage repayments if the insured is unable to work due to illness, accident, redundancy or unemployment
  • Personal accident and sickness insurance (PAS) - Providing a lump sum or income benefits if the insured suffers an accident or falls ill
  • Accident, sickness and unemployment insurance (ASU) - Providing a lump sum or income benefits if the insured suffers an accident or is unable to work due to sickness, redundancy or unemployment
  • Long-term care insurance (LTCI) - Providing cover towards the costs of long term care due to old age of infirmity
  • Private medical insurance (PMI) - Providing cover towards the costs of private medical treatment

It is also worth pointing out that it’s possible for different types of cover to be provided by one single contract, e.g. term assurances can include optional critical illness cover.

Business Protection

As a business owner you’ve worked hard to build your business, have invested in your staff and enjoy a trusting and fruitful relationship with them, your shareholders and your customers. And no doubt you’ve abided with the law and insured your premises and liabilities etc, but have you overlooked one of your key assets?

What impact would losing a key person through serious illness or death have on your company profits? And if this concerned shareholders or a business partner, how would your business cope if you couldn’t buy out their interests?

Even if you’re a sole trader, you’ll need to ensure you’ve provision in place to keep your business afloat should you fall ill.

Many business owners are unaware of business protection but whatever your circumstances, there’s a protection policy to suit your needs. From Key Person insurance to Partnership protection to Relevant Life policies we can help you identify your requirements and ensure your business is safeguarded whatever the future should bring.

Some crucial facts:

  • Over 2.5 million people will be off work at any one time through sickness or disability and will stay off work for at least 6 months*
  • 100% of SMEs believe they have at least one key person whose death or serious illness would impact on their profits, over half said they could end up closing within a year but more than 70% did not have cover in place**



*source Daily Telegraph 24/3/2010

**source Legal & General