Protection - Life Cover
We all understand the importance of life cover, but sometimes covering our home, holiday and everything else we simply forget about it, forget to ensure that we are protected.
The truth is, though, life cover is imperative for your peace of mind as well as that of your families.
Life Cover Options:
- Life Cover Level – this means that the amount you take out on day 1 for example £100,000 over a 25-year term, will always remain at £100,000, and at any point should it be claimed on in the event of your death.
- Life Cover Decreasing – this is the most common type of cover that someone would take out to protect a mortgage. It means that at any given point that it was claimed on, there would be sufficient money to pay off the given mortgage. Please note: – This would be the case providing that the mortgage had not been added to in anyway and was the same mortgage and terms as it was originally when the life cover was taken out.
- Life Cover Increasing – this is life cover which increases in line with for example retail price index and then at the point of claim, the idea is that the life cover and assuming a £100,000 sum, would be worth what a £100,000 sum would be at point of claim and would not have reduced in anyway, nor would it have stayed the same.
- Family Income Cover – this is life cover which is paid as monthly instalments, which stop at the end of your policy term.
Policy Term: It means that the Life Cover/Insurance is valid for a set period. It covers you for the money you select for that period.
Life cover will pay out if you die during the term of the policy. Many of the Life Cover policies also include terminal illness. Typically, if you are diagnosed with terminal illness and have 12 months or less to live the Life Cover company will then pay out the money that you have insured yourself for upon that diagnosis instead of waiting for death. Some life cover policies will pay out if you are diagnosed with a terminal illness with 18 months or less to live.
It is important to note that a life cover policy has no cash in value at any time.
Life cover is generally for one or two people. When getting a mortgage you can opt for a joint life cover policy.
Having a mortgage doesn’t mean you have to have life cover. It is simply there to keep your home in your possession should anything happen.
Life cover can help you maintain your standard of living.
What We Aim to Do:
Help you get the right quality of cover for your needs within your budget.
After assessing your needs, we will advise and make recommendations for you.
Our Terms of Business will confirm the market place that we review on your behalf.
PRESERVING YOUR ESTATE:
You will need a will.
Having a will is the only way to ensure that your estate is dealt with exactly as you wish when you die. It isn’t simply a case of your entire estate automatically passing to your spouse or next of kin.
If you don’t have a will then the law of the country that you live in will decide what happens to your estate. Plus, the outcome can be influenced by the laws of other countries where you have assets, of have lived in the past, which can mean it will take a long time to resolve.
Key factors that influence the law’s decision on your estate if you don’t have a will include –
1. The value of your estate
2. Whether you have children
3. If you are currently married.
A will also ensures that children or dependents are looked after
in accordance with your wishes.
Many people believe that inheritance tax is a thing only necessary for the super-rich and they don’t need to worry. However, this is not necessarily true.
Your house, your home, is likely to be the biggest single asset in your financial estate, and as a result, can impact how much of your estate is passed onto your loved ones in the event of your death.
Therefore, you may be faced with inheritance tax.
Inheritance tax isn’t just something that is payable on death, but can also be paid during your lifetime depending on how you ‘gift’ away assets.
Each year the UK Government reviews the tax rates payable, the reliefs available, the amount over which it becomes payable and how it treats gifts during your lifetime. Which means it is important to plan each year and check that your estate is passed legally and ethically to your loved ones without a major part of it being paid to the government.
What is a trust and what do they do?
A trust is a legal deed, that ensures the assets placed inside it are treated in a specific way for taxation and access.
For example, a trust can ensure that Life Cover is quickly paid out to those who need it and often without impacting taxation issues. By placing your Life Cover in trust, the proceeds can be placed outside your estate for inheritance taxation treatment.
We strongly urge our clients to consider this option.
Lasting And Enduring Power of Attorney
This allows you to grant somebody else the power to act on your behalf.
There are different types depending on where you live, what decisions you want to use it for and when you want to use it. For example, some Cover property and financial decisions and others cover your health and medical well-being.
Advice on taxation, trusts, inheritance tax planning, power of attorney & will writing are not regulated by the Financial Conduct Authority.
Will writing is not part of the Quilter Financial Planning offering and is offered in our own right. Quilter Financial Planning accept no responsibility for this aspect of our business.