What is it?
Protection is an assurance policy that will pay a regular income or lump sum should the policy holder become unable to work, suffer a serious illness or die. There are many forms of protection, the following highlights the main types available.
Critical Illness
Critical Illness (CI) will pay a lump sum if a person should suffer a serious illness or condition as detailed in their policy. Typically, there are 22 illnesses included within most policies, although most providers will allow additional cover for an increased premium. Critical Illness cover can be taken out either as stand-alone plan or combined with Life Cover.
Family Protection
Typically, Life Cover is a Level Term Assurance policy used to protect your family. It has a set sum assured for a stated number of years, that will not change during the term of the plan. Life Cover pays a lump sum in the event of death.
Family Income Benefit
This type of cover is very similar to the Family Protection cover. It is used to protect your loved ones, for a set amount and a given term. Unlike Family Protection plans, which provide a lump sum on death, this policy provides a regular monthly or annual income in the event the policy holder should die.
Income Protection Insurance
Income Protection Insurance, also sometimes called Income Protection Policy (IPP) or Permanent Health Insurance (PHI), is designed to replace income if the policy holder becomes unable to work. This could be due long term illness or sickness. You can set the deferral period to suit your needs, usually between 4 and 52 weeks; this will ensure you start to receive income when you need it whilst keeping premiums affordable. You can also stipulate how long income will continue to be received, typical for 2 years or until your selected retirement age.
Mortgage Protection
This cover will ensure that your mortgage is paid off in the event of your death. The policy will mirror image your mortgage term and amount. If you have a repayment mortgage then the plan will reduce as you continue to clear your mortgage. Many policyholders choose to include Critical Illness cover within the plan, to ensure that their family home is protected whatever fate deals them.
Whole of Life Cover
This type of policy has no end date, cover will continue until either you die or until you stop paying the premium. Typically, it is used to protect inheritance tax liability, where the liability is known but not the date of death when the liability will become payable.
Benefits of Personal Protection Cover
Protection needs change with life events. If you are single and renting your first home, your only need might be to protect your income if you fall ill. If you buy your first home you might want to clear your mortgage should you or your partner die or suffer a serious illness. If you have a young family you may need several policies. We can help guide you through the options available and find the most competitively priced cover to ensure you have the best policy to suit your budget.
