rda - Life & health inusurance - Life assurance

Tailored Financial Planning


			Life Assurance Life Assurance is the simplest type of protection policy available. It has a specific amount of cover, called the ‘Sum Assured’, which is chosen to suit your own needs. You decide how long you need the protection for; this period of time is known as the ‘Term’. In the event of a claim during the Term the Life Assurance company will pay to you, or your beneficiaries (or dependants) the Sum Assured as a tax-free lump sum. When you survive the Term the policy ceases. There is never a surrender value at any time, so if you no longer require the cover you simply stop paying the premiums without any penalty.
			How much cover do I need? After a meeting our Financial Advisor will be able to provide you with advice. What type of cover do I need? There are different types of Life Assurance and you may wish to discuss them with one of our advisers to help you decide which is most suitable for your needs. The following is a simple look at some of the various options that you may want to consider. Under certain circumstances we would also recommend that you consider the option of putting your policy under Trust, and are happy to offer advice to you as to the suitability in your own personal circumstances. Option 1 – Mortgage Protection (decreasing term assurance) This is specially designed to protect a normal repayment mortgage. The level of cover is set to match the original mortgage amount, and reduces over the years as you pay your mortgage. It is sometimes known as a decreasing term assurance policy and usually guarantees to pay off the outstanding mortgage, assuming the mortgage interest rate payable does not exceed a certain rate. As the level of cover is always decreasing the policy premiums will be lower than for an equivalent Level Term policy, but they will remain fixed throughout the term. Important Note: If you have taken out a flexible style mortgage, this policy may be unsuitable for your needs. Please seek advice before finalising your policy. Option 2 – Level Term Assurance This is a Life Assurance policy where the life cover is constant throughout the specified term. For example, a £50,000 Level Term policy taken over 10 years means that if you die within 10 years then £50,000 will be paid to your estate tax-free (although inheritance tax may need to be addressed). This type of policy is most suitable for protecting your family from financial difficulties in the event of your death. It can also be used to protect an interest-only mortgage, or where necessary, a flexible style mortgage. The premiums remain the same throughout the term. The benefits payable can also be index-linked so that they rise with the percentage rate of inflation. If this option is chosen the premium would also increase by the same percentage. Contact us today