Protection policies will insure against
something happening within a given period,
known as the term, and will pay out either
an income or a pre-determined capital amount,
should the specified event occur during
the term of the policy.
For example you may take out a term assurance
policy to provide a family with protection
against the death of the principal breadwinner
while the children are still young. If the
breadwinner dies within the specified period,
a lump sum is paid to the family. If the
breadwinner survives then the policy becomes
worthless and the family receives nothing.
These term policies are relatively inexpensive
but premiums will be determined by the life
insured's age and medical condition, whether
he or she is in a hazardous occupation and
whether he or she smokes.
Policies may be written on the life of
an individual or on the lives of husband
and wife for example, in which case there
may be an option to pay out on the first
death or only after the second death.
You should look at how much you are paying
as the cost of these plans has reduced in
If you would like
a quotation please email
us and we will respond immediately.
Term Assurance -
Provides a lump sum on the death of the
life or lives assured. If no death occurs
in the term, then the policies simply lapse,
with no value.
Family Income Protection
- Provide an income in the event
of the death of a parent. These policies
are designed to allow for the employment
of a nanny or helper to look after the children
while the surviving parent is at work, or
provide an income should it be the principal
breadwinner who dies. The policy will provide
cover against death during a fixed term
and will cease at the end of the term without
Assurance - Designed to provide for
the repayment of any outstanding loan on
a repayment mortgage. The payout will normally
be made on the death of one of the mortgages.
Premiums will normally fall as the sum insured
gets smaller. There is no value to the policy
once the mortgage has been repaid.
Assurance - Is designed to provide
basic term assurance cover at outset with
the option to convert to other types of
policy in later years as circumstances change.
There will be restrictions on the types
of policy which it can be converted to and
on the dates when conversion is allowed.
Normally, conversion can take place without
any additional medical examination.
From very early days in their history,
life companies have also offered policies,
which are in effect a means of saving. These
policies were made more attractive by tax
relief on premiums, and the fact that for
many, the life company acted as a tax haven
in that the rates of tax payable by the
life fund were lower than those levied on
the policyholder. While such tax incentives
are a thing of the past, life assurance
policies retain some attractions.
Endowment Policies - Are designed
to pay out a cash sum on a specified date
or on prior death. Level premiums are paid
throughout and the final maturity value
will depend on the performance of the underlying
unit linked or with profit funds. Policyholders
may decide to stop payments prior to the
maturity value and cash in the policy for
a reduced sum, the policy may be sold or
the policy can remain in force and pay out
a reduced sum on maturity.Provided the policy
was originally for a term of ten years or
more and premiums have been paid for more
than 7.5 years, then the proceeds of the
policy are tax free in the hands of the
policyholder. Policies taken out before
March 13th 1984 still qualify for tax relief
on the premiums.The endowment has been used
to provide a capital repayment for interest
only mortgages, though this is less fashionable
now than used to be the case because of
the greater tax benefits of using PEPs or
pensions as repayment vehicles. The advantage
of the endowment lies in the ability of
the life office to include such options
as Low Start, critical illness and waiver
of premium resulting in greater protection
and flexibility.The endowment policy is
used for a number of different purposes
and may go under different names as life
offices package the policy to meet certain
needs. For example the endowment policy
becomes a School Fees Plan, providing capital
sums for the payment of school fees.
Whole Of Life Policies - Are basically
a very simple policy which pays out a sum
assured whenever the life assured dies.
Because there is the certainty of payment,
the policies are more expensive than term
assurance where payment is only made if
death occurs within a certain timescale.
Whole of life policies may be regular premium
or lump sum single premium. They may be
non-profit, in which case only the guaranteed
sum will be paid on death, with profit where
the amount payable is the sum assured plus
whatever profits have been allocated to
the policy up to the date of death, or unit
linked where the amount payable is the sum
assured plus any additional value from the
investment performance of the units.With
all whole of life policies there are two
elements, the cost of the life insurance
cover, which is higher in the early years,
and the investment element which may be
low in the early years but then builds up.
Single premium bonds are written in the
form of a whole of life policy but usually
provide little or no life cover. Most policies
will have options such as critical illness,
permanent disability and permanent health
cover as extra cost options, making them
very flexible. Whole of Life policies can
be very useful in providing a fund to meet
Inheritance Tax. The premiums will normally
be covered by the annual exemptions, and
by writing the policy in trust for the beneficiaries,
the proceeds fall outside the taxable estate.
In the past, if a policyholder needed to
encash his or her endowment policy, the
only option was to obtain a surrender value
from the life office issuing the original.
Surrender values, even in the years approaching
the policy's maturity are much lower than
the actual maturity value. It is now possible
to sell the endowment policy and the proceeds
can be far higher than on surrender. If
you want to look at selling your policy
then please contact us. You should bear
in mind that surrendering or selling your
endowment early is likely to mean a shortfall
if it is linked to the repayment of your
Mortgage Payments Protection Policies
- Are designed to insure against being able
to continue making mortgage payments due
to sickness or unemployment. In the event
of the insured becoming sick, having an
accident or being made unemployed, the insurance
cover meets the mortgage interest and repayments
or life assurance premiums. This is becoming
increasingly important as the State cuts
back on its assistance for mortgage payments
in such circumstances.
If you have cover that has been organised
by a Bank or Building Society then call
us as we can nearly always beat the price
you are paying.
It is always worth looking at these
plans on a regular basis as the cover you
need changes as your income goes up.