It’s sometimes referred to as ‘it won’t happen to me’ insurance, but putting protection plans into place for your family is important. It means that you’ll have an income that you and your loved ones can rely on if things in life don’t quite go according to plan.
As there are so many different kinds of protection on the market, an Independent financial adviser (IFA) is the best placed expert to guide you through each type, explain what it will do, how much it will cost and how it could help you if the unexpected happens.
Trusts are not regulated by the Financial Conduct Authority
To help you select the protection you need here's a quick comparison
| INCOME PROTECTION | LIFE ASSURANCE | CRITICAL ILLNESS COVER | MORTGAGE PAYMENT PROTECTION | |
|---|---|---|---|---|
| WHY YOU MIGHT NEED IT | If you need money to live on when you’re off work sick for a prolonged period of time. | If you need to make sure your family is secure and/or mortgage or other debts are paid off if you die. | If you need money to support you and pay for further care while you recuperate from a serious medical condition; or in case you can never work again. The lump sum may also be used to help pay off a mortgage or other debts. | If you need to keep up your mortgage payments if you are off sick. |
| WHEN YOU CAN CLAIM | If you can’t work because of: - Sickness - Accident - Disability. |
If you die or become terminally ill. | If you or one of your children get a Critical Illness covered by the plan. Option to include cover for Permanent Total Disability or have this on its own. | If you can’t work because of: - Sickness - Accident - Disability. |
| MONEY SAVING OPTIONS | Budget protection is available. Choice of deferred periods available. | It can be combined with Critical Illness Protection. | It can be combined with Life Protection, and/ or linked with Mortgage Payment Protection. | You can include it with Critical Illness Protection (either the standalone version or when also combined with life cover). Budget protection is available within the health cover option. |
| WHAT IT PAYS OUT | A regular monthly income, to the end of the term of your plan if necessary. The budget cover option pays out for a maximum of 2 years. | A one off lump sum can be paid when the legal process of winding up your estate is complete. (If written in Trust, the money can be paid immediately). | A one off lump sum if you survive 14 days after being diagnosed. | Monthly amount to help pay your mortgage, to the end of the term of your plan if necessary. The budget cover option pays out for a maximum of 2 years. |
| WHEN IT PAYS OUT | You choose the time delay – 1,2,3,6,12 or 24 months after you become sick or have an accident. | As soon as possible after the claim is made, although in some cases the beneficiaries may not be entitled to receive the money until your estate has been officially wound up. | If you survive 14 days after diagnosis. | Health claims: You choose the time delay – 1,2,3,6,12 or 24 months after you become sick or have an accident. |
| HOW THE MONEY IS TAXED | It is normally tax-free. | If it is paid to beneficiaries it is normally tax free and when paid into the estate it is subject to IHT. | It is normally tax-free. | It is normally tax-free. |