Life Insurance: Is it time to review your cover?

If you’ve taken out a life insurance policy it’s tempting to cross this important task off your ‘to do’ list, put the paperwork somewhere safe and forget all about it.

However, if you don’t review your policy from time to time, you could risk being underinsured, or be missing out on a newer, more cost-effective policy that might better suit your needs.

So, here are a few life stages when it often makes sense to talk about protection insurance with us.

GETTING MARRIED OR ENTERING A CIVIL PARTNERSHIP

If you’ve decided to share your lives, the chances are that you’ll also be sharing your wealth. This means that it’s important to make sure that if anything were to happen to either of you, there would be funds available to meet your financial commitments.

MOVING TO A BIGGER HOUSE

A larger home often means a bigger mortgage, so you need to consider taking out more protection insurance to cover the additional amount you’re borrowing.

HAVING MORE CHILDREN

If your family is growing, your financial responsibilities are likely to increase, and your cover will need to reflect this. It is often when families reach this stage that they find it’s appropriate to consider other forms of cover, such as accident, sickness and unemployment, critical illness or income protection.

YOU’VE GONE UP IN THE WORLD

If you’ve received a salary increase or promotion, your lifestyle might have changed too. Your children may be in private school, and your family may have got used to expensive holidays and meals out. If that’s the case, then it might be time to increase your cover, so that if anything were to happen to you, they could continue to enjoy a good standard of living.

RETIREMENT BECKONS

At this time in life, a protection policy can help in Inheritance Tax planning, providing a payout on death that will help cover a tax liability on your estate.

A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

Income protection (with no investment link) has no cash in value at any time and will cease at the end of the term. If you stop paying premiums your cover may end.

80% OF MORTGAGE HOLDERS DON’T HAVE INCOME PROTECTION

For most of us, our mortgage is likely to be the biggest expense we have in our lifetime, so it pays to think about what would happen if you could no longer pay it. Sadly, as we all know, sometimes things don’t go according to plan, and our lives can be turned upside down.

One of the most compelling arguments for families taking out protection policies is to ensure that their families are able to carry on paying the mortgage in the event of an illness, long-term sickness, accident or death. With a policy in place, there would be an income or a lump sum available to them to keep a roof over their heads, meaning that they wouldn’t be burdened with money worries at a difficult time.

AN IMPORTANT STEP THAT SHOULDN’T BE PUT OFF

A recent survey1 amongst mortgage holders found that 42% don’t have a life insurance policy in place, 71% have no critical illness cover, and 81% don’t have any income protection in place.

Whilst many people realise that having a policy in place would provide valuable peace of mind, taking out a policy is a task that never quite gets to the top of their priority list; 20% of full-time working people questioned for the survey recognised that they would benefit from having insurance protection, but hadn’t got around to arranging it.

Getting the right policy in place needn’t be stressful or time-consuming. We will be able to review the market and recommend a policy that’s cost-effective and provides the right type and level of cover for your circumstances.

1Royal London, State of the Protection Nation, 2018

A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

DON’T UNDERESTIMATE THE VALUE OF INSURANCE

Insurance policies are designed to provide financial safeguards and valuable peace of mind. If you’re a homeowner then it makes sense to have plans in place that protect you, your family and your home.

LIFE INSURANCE TAILORED TO YOUR NEEDS

There are various plans designed to protect you and your family:

·         Life policies – these provide a taxfree sum for those you leave behind in the event of your death. If you have a mortgage, it’s a big financial responsibility and no-one would want to leave their family with money worries at a sad and difficult time.

·         Critical illness cover – this means that if you are diagnosed with a serious illness as defined in your policy, there’s a cash payout to help alleviate financial worries and protect your family.

·         Income protection – these policies provide a monthly pay-out that helps pay your mortgage and other living costs in the event of an accident, sickness or involuntary unemployment.

PROTECT YOUR POSSESSIONS AS WELL AS YOUR HOME

Buildings insurance covers you for damage to the structure of your home. When you take out a mortgage, your lender will require that you have buildings insurance in place and that it covers the cost of rebuilding the property and its permanent fixtures and fittings. The rebuilding cost isn’t the same as your property’s market value, it’s generally a lower figure which will be detailed in your lender’s valuation report or arrived at by using an online calculator.

Mortgage lenders don’t insist that you have cover for your home contents but it makes good sense to protect them against risks like burglary, fire and flood. You can also arrange insurance for valuable items like jewellery, and those belongings you use away from home, such as laptops.

If you would like some help in ensuring you have the right protection policies for your needs, do get in touch.

WHY FAMILIES NEED PROTECTION AGAINST LIFE’S UNEXPECTED EVENTS

WHY FAMILIES NEED PROTECTION AGAINST LIFE’S UNEXPECTED EVENTS

We all want to do the best for our families, and keep them properly protected on every occasion. Understandably, nobody wants to dwell on the unwelcome and unexpected events that life sometimes has in store. So, it’s hardly surprising that many people overlook the benefits of protection insurance that could be a great help financially in the case of an accident, illness or death.

One of the many occasions when it can be vital for parents to think about the protection policies they need to have in place, is when they are making their wills. It’s often the case that couples will, very sensibly, nominate relatives or close friends whom they would like to step in to act as a guardian to their children, if anything were to happen to them both.

Although anyone appointed to fulfil this important role would be gratified to be thought of as worthy of carrying it out, it’s important to remember that there could be all sorts of financial implications for them and their families.

PROVIDING FOR YOUR FAMILY’S FUTURE

If family members or friends had to step in and look after the children, they would need to have sufficient financial provision in place to be able to do so. If, for instance, the guardian lives in a different part of the country, they might have to move both house and job to look after the children’s needs. A pay-out from a policy could make the difference between your family facing a financial struggle at a challenging and emotional period in their lives, and being able to maintain the sort of lifestyle they enjoyed when you were still around.

HOW WE CAN HELP

We’re on hand to help you choose the most appropriate cover, based on our research into what’s on offer from a wide range of insurers. We can save you hours of internet searching and calls to insurance companies for quotes, and make the process far less time-consuming and stressful.

GETTING THE MOST FROM YOUR INSURANCE POLICY THIS WINTER

High winds and rain can cause major damage to property, so before winter tightens its grip, it’s worth checking (without putting yourself in danger) that your roof is in good repair, and that gutters are clear of leaves and other blockages. Make sure items like patio furniture and children’s play equipment are stowed safely away in a garage or shed. Clear paths of moss, and keep salt handy to clear ice and prevent falls.

MAKE SURE YOU HAVE THE RIGHT COVER IN PLACE

It’s also a good time to check out the details of your home insurance policy. If you’re not sure what sort of cover it provides, you should check your policy schedule now. Keep a note of your insurance company’s emergency and claims handling telephone numbers in case of need. Check you know what your policy excess is – this is the first part of your claim which you have to pay yourself. Knowing this will help you decide if it’s appropriate to make a claim.

If you want to increase the type of cover you have for home emergencies, then we can help you find the right policy for your needs. Home emergency policies typically cover problems that arise with plumbing and drainage, main supply pipes for water and gas, central heating, glazing and windows, home electrics and home security.

PREVENTING FURTHER DAMAGE

If you suffer damage, you may need to think about carrying out temporary repairs to prevent the damage getting worse. Call your insurer’s emergency number first, and ask for their advice. Keep the receipts for any work they suggest you carry out, as you may need these for your claim.

It’s a good idea to take pictures of the damage, but don’t put yourself at risk of harm by doing so. Don’t rush to get rid of damaged items, as your insurer may want to inspect them.

For advice call 01604 433 035

WHY IT’S A SHAME THAT MANY UK ADULTS DON’T HAVE LIFE COVER

Life insurance may not be at the top of many people’s ‘to do’ list, but arguably it’s one of the most important financial products anyone can take out, and one of the best ways of leaving loved ones provided for financially.

Life insurance doesn’t just pay a lump sum on death or (with a combined policy) the diagnosis of a critical illness, it can (with other add-ons or in ‘whole of life’ form) help provide an income for families hit by an accident, sickness and unemployment, help parents pass their wealth on to future generations and play a major role in inheritance tax planning too.

A recent study1 has shown that only around 26% of UK adults have any form of life insurance. What this figure means is that too many UK families are risking the consequences of life’s unexpected or unwelcome events. In the event of a death, diagnosis of a serious illness, accident or unemployment there would be no lump sum pay out or income payment from an insurance policy to fall back on.

WHY THIS IS SO

One reason given was a belief that insurance companies don’t pay up in the event of a claim. However, the most recent industry figures show that insurers pay out 97.2%2 of all claims. UK companies pay out over £10m every day on protection policies, including income protection, critical illness and life insurance. When they don’t pay out, it’s usually because of incorrect information having been provided by the policyholder when the policy was taken out.

Cost is often cited as a reason for not taking a policy. However, an analysis of premiums paid by respondents in the research shows an average life insurance policy premium of £21.28 per month for over £120,000 of cover. The average critical illness cover premium reported was £30.58 per month for over £71,500 of cover. This represents a relatively small outlay that could mean real peace of mind.

1Royal London, 2017 
2Association of British Insurers, 2016

Five years on – and £26bn later – it’s time to call an end to the PPI farce

The Independent – by Andrew Hagger

http://www.independent.co.uk/money/insurance/five-years-on-and-26bn-later-its-time-to-call-an-end-to-the-ppi-farce-a6926391.html

Consumers have had almost five years now in which to claim compensation for mis-sold payment protection insurance, yet the regulator has indicated that this sorry saga is likely to drag on for at least another two years.

While it’s right that those who were mis-sold PPI have the opportunity to get their money back, surely half a decade is enough time to ensure this is achieved.

It beggars belief that there are people out there yet to make a claim, although in reality many probably aren’t that bothered until they get pressurised into doing so.

So far PPI has cost the banks in excess of £25bn, with around £5bn boosting the profits of the claims -management companies – yes, those same firms that have made our lives a misery with their constant cold calling.

It’s a farcical situation but the Government is in no hurry to draw a line in the sand as this stealth tax on high-street banks has injected a valuable stream of cash into the UK economy. But what has been the cost to the rest of us?

How much more reliable would bank IT systems be if those billions in compensation hadn’t made a huge hole in annual profits? How many bank staff have lost their jobs? And how many bank branches have closed while the claims companies enjoy their bonanzas?

I’m not usually one to stick up for the banks but we now have an unhealthy compensation culture in this country, with too many thinking it’s fine to make a claim against them. And remember: PPI may still have another couple of years to run but the claims- management industry already has eyes on its next pot of gold – packaged bank accounts.

How many times have you rushed to answer the phone only to find it’s yet another PPI nuisance call? And how many old and vulnerable people are now reluctant to pick up the handset even when it may be a friend or relative.

Type PPI into your search engine and you’ll be astonished by the number of vultures that have sprung from nowhere to make some easy money at the expense of the UK financial services sector.

Away from the greed and constant excuses to bash the banks every time complaints figures are published, there is a far more serious consequence of this insurance fiasco.

Clearly PPI was barely fit for purpose, but the non-stop barrage of negativity around this now-defunct product means that people are now reluctant to consider life insurance or protection of any kind.

Insurers are in a similar situation to the banks in that they too have been dragged through the mud and lost the trust of the public.

More than 10 million people have been paid compensation to date, and if you’re one of those who haven’t claimed then there are probably one of two reasons why: either you live on another planet or perhaps you are one of those consumers who actually saw some benefit in their PPI policy, which paid out when you lost your job or were off work sick.

Five years on – and £26bn and counting later – it really is time to bring this PPI mess to a conclusion and let our banks get on with running their businesses, without this albatross distracting them from doing their day job.