Peter Hancock
Financial Planning Ltd.
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PROTECTION:
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Question:
Who is going to take care of your family if you
are seriously ill or die?




Answer:
You are...and I can show you how!



In the ideal world we would all live to a ripe old age having enjoyed a full family and working life, followed by an active retirement.

But we all know that this doesn’t happen to everyone.

We all have family or friends who have become seriously ill or died prematurely and it’s very likely that you will have witnessed at first-hand the financial trauma that these events can cause.

Financial solutions can be put in place to help with some of the hardships that follow a prolonged illness or an unexpected death.


Insurance is just like paint...
...it should cover properly


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For people with mortgages or family responsibilities, having an adequate level of financial protection in place is simply a matter of common sense. You may already have some protection policies in place.
But when was the last time you reviewed them?


Changes in your personal circumstances may mean that it’s time to examine your insurance arrangements. It could be that your existing cover is adequate.

But if you haven’t reviewed it recently, how can you be sure?

Many people have existing policies in place and are unsure what they actually do cover and how they will pay out !

The cost of life assurance has reduced for many people in recent years. Developments in medical science and in the treatment of serious illnesses has meant that our life expectancy is now longer than ever before and we pose less of a risk to the insurers. Unfortunately however that doesn’t mean that you can ignore the subject!

As professional financial advisers we are experts in providing advice and arranging protection. We help to reduce our clients’ worries by ensuring that, should the worst happen, the emotional impact of the situation isn’t made worse by the absence of proper financial provision.

As we are independent advisers we can search the market for the most suitable and competitive deals for you.



I’ve listed below some of the types of protection plans that I use to provide solutions in the areas I've highlighed. I’ve tried to explain them in a ‘Plain English’ way to get the main messages across about what the products do.

However for a more detailed explanation or a personalised illustration just click on one of the ‘link’ buttons to request more information or to set up a meeting when I will go through these areas in more detail.


• Life Insurance usually pays a fixed sum should you die within the policy term. Premiums can be either fixed or decrease over the period of the insurance according to your needs. There are a number of variations of this type of policy that can be used to provide lump sum cover for mortgages, family protection and to provide care for an elderly dependant.

• Family Income Benefit is a type of life insurance which pays your family an ‘income’ for the term of the policy to help them cope without you. It can be set up on an increasing basis and is useful in particular for providing a ‘salary replacement’ in the years when your children are going through school and further education and are at their most expensive time.


• Income Protection
is used to help replace lost income in the event of long-term illness or accident. Cover is usually arranged over a term to coincide with retirement or at least until the end of your mortgage term thereby providing cover for the period when you will need it most.


• Critical Illness Insurance can provide a ‘one-off’ payment or an income if you are diagnosed with a specified illness, to help you cope with the consequences. This can also be combined with life insurance within one policy that will pay out in the event of ‘death or a critical illness’ and is ideal for covering your mortgage or other loans.


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Life assurance - It’s time to review!

Here’s an example of how using an independent financial adviser for your insurance planning can make sure you’re getting the best value for your money!

If you have an existing life assurance policy and you are in good health it is likely that you can increase your cover substantially without paying out more for it!

Alternatively it may be possible to cut the cost of your premiums.

Here is an example of an actual case that I looked at recently for some new clients who had been ‘shopping around’ for additional life cover.

I produced illustrations for them from an Independent source that compared the costs of life cover from the leading providers.

They wanted level life insurance cover for £120,000 over a fifteen year term.




















































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Here’s a summary of what we discovered for them.

Life cover
Lowest
monthly premium
Highest
monthly premium
Term
£120,000 £13.90 £17.20 15 years

There is a difference in monthly cost here of £3.30 (or an increase of more than 23%) between the lower and the higher premiums. These clients had already been quoted a premium similar to this higher figure by their bank and felt that the cost was quite reasonable before they were recommended to talk to us.

Here are a couple of the alternatives we considered for them:

............................................................................................................................................................................................

Alternative A.

If they were to pay the amount of the higher monthly premium
to the least expensive provider these clients could increase their life insurance cover substantially.

Life cover
Monthly premium
Term
£162,449 £17.20 15 years

This alternative idea produced an increase in cover of £42,499 (or over 35% more than the original figure) for a premium that they thought was ‘reasonable’

............................................................................................................................................................................................


Alternative B.

If they were happy with both the amount of life cover and how much they were paying for it they could have extended the term of the policy by thirteen years for slightly less than they were already prepared to pay.

Life cover
Monthly premium
Term
£120,000 £17.17 28 years

This is an increase in the term of the policy of more than 86% and means that the clients will still have the life cover in place until they are aged 66 and 65 respectively rather than have the policy ending when they were only 53 and 52.

............................................................................................................................................................................................


In these examples the couple were a male aged 38 and a female aged 37. They were both non-smokers and had no existing health issues.
All examples assume that the insurance companies quoted are able to issue standard acceptance terms to the clients.

Protecting your family and dependants is a serious subject and reviewing existing levels of cover is often overlooked if you have policies already in place.

A simple review of their cover for these clients has meant that they now have extra cover in place which could be used to repay their car loans, credit cards and overdraft if either of them died...... without any extra monthly cost!


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