Rarely do we consider the financial implications of losing a loved one, therefore it is important to analyse your current circumstances. Ask yourself how it would affect your family's lifestyle if they no longer had the stability of your income and/or your partner's income. Lighthouse London advises on a range of protection policies for both individuals and businesses.
There are many forms of life assurance which can protect you and your family in the event of a family death. Choosing the right policy for you can depend upon a number of factors including cost, tax and the protection required.
You can use the information and tools on this site to gain a basic understanding of what is available. However, this information is only an overview. Only expert, professional advice following a full review of your circumstances, will ensure you find a solution that provides peace of mind.
Life Protection can be used to protect income, loved ones and businesses and in certain circumstances, can be arranged in such a way as to minimise the effect of tax.
Whole of Life Assurance policies are designed to provide life assurance cover for the whole of your life rather than a specified term (e.g. 25 years) and can also include critical illness benefits. They contain a savings component which builds up a fund whereby a fixed death benefit is paid to the beneficiary. This type of policy can also be used in certain circumstances to mitigate an inheritance tax liability.
Term Assurance is generally the cheapest and simplest form of life assurance. You insure yourself for a set term (e.g.15 years). The policy will only pay out if you die within this time period. There is no fund value at anytime.
Mortgage Protection is a type of term assurance, sometimes called decreasing term, and is specifically designed to repay your mortgage should you die within the term of the policy.
Family Income Benefit is designed to pay a monthly income in the event of a claim to the end of the policy term. This is another form of decreasing term assurance and is often used to protect a family where there are young children.
This benefit is paid on the diagnosis of a life shortening illness e.g. stroke, heart attack and some forms of cancer. The majority of insurers refer to the Association of British Insurers standards for illnesses that qualify as being 'life shortening' and it is imperative that you understand the terms of each illness.
The growing trend is also for insurers to have severity-based benefits. For example, there may be a lower payout for an easily treatable cancer or heart attack. With severity based benefits, a lot more conditions are usually covered and the lowest payout may be a small proportion of the maximum payout. With severity based benefits the policy usually continues after there has been a payout
Permanent Health Insurance (PHI) pays a percentage of your income if you are not able to work for a period of time. The amount of cover needed should be based on the estimated level of expenditure of the individual or family while the insured person is incapacitated, less any other income that may be received during that time, i.e. the earnings of partner or spouse, rental income, investment income, state benefits etc.
It is not just people with mortgages who need this type of protection. There is a choice of Income Protection policies designed to provide you with a replacement income whether you have a mortgage or not.
Mortgage Payment Protection insurance is a way of protecting your mortgage and ultimately your home should you be unable to work due to an accident, sickness or redundancy.
It is designed to protect you from falling behind with your monthly mortgage payments by enabling you to pay your mortgage and other essential household costs should you become unable to work. By insuring your monthly mortgage payments you can be confident that one of your major financial commitments is protected.
Private Medical Insurance (PMI) is designed to cover treatment of acute medical conditions and the diagnosis of a new chronic condition. Existing chronic conditions are not normally covered and it is important to know the difference between acute and chronic.
Acute conditions usually come on quickly and do not last for long and are cured or resolved by treatment. Chronic conditions are long term or permanent and cannot be cured and may sometimes leave you with a disability. PMI is generally an indemnity policy which means that the insured person can only claim the amount of the costs that have actually been incurred.