Life does not always go the way we hope. Accidents happen. Illness can strike at any time.
The one thing we can be sure of is that bills will still need to be paid and our families must have food on the table, even if an income stops coming in.
Could your loved ones manage without you? What kind of insurance cover do you need to help ensure that they would?
There is no single answer. We all have different needs – which is why at Continuum we make tailored insurance cover part of our financial planning.
What cover do you need?
Life cover is easy to understand. You pay a monthly premium and in return you have the reassurance that your dependants will be provided for if you’re no longer there to provide for them yourself.
Life insurance or ‘term insurance’ is designed to ensure that your dependents receive a lump sum if you were to die prematurely. The key question is how large that lump sum should be. It is entirely possible to arrange a sum large enough to pay off your mortgage, which is the major expense for most families, and provide an income to replace your own.
The problem might be affordability. This level of insurance will be costly, and most people will need to trim the cover they can have according to the monthly premiums they can afford.
Getting value for money is vital when you are looking for insurance cover, and at Continuum we can search the market to get the cover that is the most suitable for you and your family.
But there are other ways to keep costs under control. You can tailor your cover by only arranging term insurance to the period when it will be most needed, which will be your key working years, when you have children at home, or to coincide with the date you plan to pay off the mortgage.
But remember – the younger you are when you take out your cover, the less it may cost.
Insurers work by actuarial tables and as a young individual, you may be statistically less likely to die. At Continuum we can show you how you actually save money by starting young.
Term cover can be arranged to increase in line with inflation, to decrease in line with the amount outstanding on your mortgage, to cover you both as a couple rather than as individuals – and there are many more variations.
At Continuum we can help ensure that the cover you have is the cover that you – and your family – really need.
But term cover, although the most popular is not the only kind of life cover there is.
Whole of life cover
Whole of life cover, or life assurance is, as you’d expect, an insurance plan that lasts for an entire lifetime, rather than a set term. Like life insurance, it is designed to provide a lump sum payment to your family.
But we will all die eventually and because a Life Assurance policy is sure to pay out sooner or later it is likely to be more expensive than term cover. But it has an important place as part of your protection planning. It can provide tax-efficient inheritance planning cover for your family, helping to pay off the inheritance tax burden on your estate and leaving them with more of your wealth.
Life insurance or assurance may be the most obvious cover that you need, but you might want to consider some other forms of protection. Serious illness cover is designed to provide a lump sum if you were injured or contracted one of a specified list of illnesses that left you unable to work. Cancer Cover is an alternative that focuses only on cancer and therefore in some circumstances may cost less than serious illness cover.
You might also consider personal accident insurance and income protection, which could offer a lump sum or a monthly income if you were ill or injured and unable to work.
The tailored cover that you need
The important thing is that your cover is tailored to your needs and your budget. We can sit down with you to discuss how much cover you need and the kinds of cover that will provide all-round financial security.
Then, because we are independent, we can search the entire market at the most cost-effective way to provide it.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable Protection products, you should seek independent financial advice before embarking on any course of action.
The Financial Conduct Authority does not regulate taxation advice.