Protecting your future

Start 2006 on a secure foundation

For most of us, our income funds everything. If it ceases, everything else stops, so how do you ensure its continuation? The answer is PHI, also now known as Income Protection Insurance. This is a form of protection that pays out a regular amount if you are unable to work because of sickness, accident or disability.

PHI can replace a percentage of your income, less any state benefits and cover provided by your employer. The payments are paid tax-free and commence after a period that you specify. You can also decide whether, in the event of a claim, you require the benefit payment to remain level or to escalate annually.

Critical illness protection is an insurance that pays out on the diagnosis of certain specified critical illnesses. The illnesses covered vary from policy to policy, but they usually include six core conditions: specific forms of cancer, heart attack/coronary by-pass surgery, kidney failure, major organ transplant, multiple sclerosis and stroke. Within a specified period of an illness being diagnosed, you would receive a tax-free lump sum payment.

The financial consequences of not having critical illness protection could be significant. Calculate the size of your outstanding mortgage, liabilities and other financial commitments.

Would you be in a position to repay them if you were diagnosed as suffering from a critical illness, or do you have a shortfall?

It’s not a particularly pleasant thought planning for your premature death. However, if you have dependants, it’s essential. Life assurance is designed to do one of two things: replace lost income for dependants or provide a capital sum to repay liabilities. So what are some of your options?

• Term assurance policies guarantee to cover you over a fixed term, specified at the outset.
• Decreasing term assurance is usually used in connection with a repayment mortgage.
• Family income cover pays out as a regular stream of capital payments, which is continued through until the end of the term.
• Whole of life assurance is designed to pay out a lump sum on your death whenever this occurs. This type of life assurance can also be used as a vehicle to plan for inheritance tax mitigation when combined with a trust.

If you require any further information about the services that we provide or would like to review your financial planning position, please contact us

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