Protection
You wouldn’t leave your home or car uninsured, so why leave your family and mortgage unprotected? Get expert advice to secure what matters most—your family, your life, your future.
Life Insurance
Protecting What Matters: Affordable Term Life Insurance Explained
What is mortgage life insurance?
Mortgage life insurance – also referred to as mortgage protection or decreasing term insurance – is a type of insurance that pays out if you die before you finish paying your mortgage.
Its aim is to stop anyone you leave behind from worrying about paying the monthly repayments, or be forced to sell the property to repay the amount still owed.
This is designed to cover the balance on your mortgage if you were to die during the term, so the amount you’re covered for decreases in line with your mortgage debt, though it is worth bearing in mind that if you take a mortgage payment holiday, the payout amount may fall short of the mortgage balance.
It’s often cheaper than level term, however, if you want to leave a lump sum for your dependants to cover other debts and ongoing spending, a level-term life insurance policy is likely to be a better option (though you could always have both).
Alternative types of life cover
Level term – where the payout is fixed for the length of the policy.
Put simply, it’s an insurance policy that pays out a set sum if you were to die while it’s in force. Its aim is to provide financial support to those you leave behind, to prevent the loss of your income from causing a money crisis.
Level term’ is the simplest type of life insurance and the name tells you all you need to know.
Level: When you take out a policy, you determine how much you’d need it to pay out, e.g. £200,000. This remains ‘level’ – meaning it’s fixed at that amount – for the duration of the policy.
Term: You choose how many years you’d want the policy to cover you for, e.g. 25 years. You usually can’t remain covered past the age of 80, though this maximum age does vary by provider.
The more cover you get and the longer the term you want, the more it costs. You pay via a monthly premium which continues until the policy either pays out (if you were to die during the term) or the term ends
Family income benefit (FIB) – provides a regular income, rather than a lump sum.
This provides an annual tax-free payment for the length of the policy term, e.g. £10,000/yr for 10 years. So if you died five years into the policy, your dependents would receive £10k for each of the remaining five years. The amount it pays out therefore reduces over time, so policies tend to be cheaper than level term.
Decreasing Term – the payout reduces in line with your mortgage over the term. The amount & term match your mortgage at the outset and generally reduces year on year in line with your mortgage as it reduces. This is therefore the minimum required for a mortgage and is the cheapest.
Critical Illness Cover
Financial Support When You Need It Most
Critical illness insurance provides you with a lump sum of money if you are diagnosed with certain illnesses or disabilities.
The kinds of illnesses that are covered are usually long-term and very serious conditions such as a heart attack or stroke, loss of arms or legs, or diseases like cancer, multiple sclerosis or Parkinson’s disease.
If being ill has left you out of pocket, it can be really handy to have a large sum of money to spend on things like everyday expenses, paying off your mortgage or your medical expenses. You can use the money in any way you like, you don’t have to spend it on anything in particular.
You may have other income coming in while you’re ill such as state benefits or sick pay from your employer. However, this may not cover all your needs. It’s a good idea to think about how much you would need to live on if you became seriously ill and whether you would need some extra money to boost your income.
How does critical illness cover work?
You’ll usually need to choose how much you’d want the policy to pay out, and how long you’d like the cover to last. For example, you could choose to only keep cover until your mortgage is paid off, or leave it running until the upper age limit when the cover automatically ends – which is typically around age 75.
The insurer will usually ask you to complete a health questionnaire during the application process and may ask to review your medical records, so it’s important to declare all pre-existing health conditions when you apply.
It will then consider all your details to determine the monthly premium you’d need to pay – the riskier you appear (for example, you have an active or stressful job and/or a family history of serious illness), the higher the cost.
Once the policy is active, you can then make one claim if you’re diagnosed with a specific illness that it lists – though it won’t pay out if you die (that’s what life insurance is for). Once you receive the lump-sum payment (which is tax-free), you can use the money for anything you like, whether it’s to pay off the mortgage, cover lost income, day-to-day expenses or health-related costs.
Most policies only pay out once, so if you do have to claim then the policy will end. This extends to joint policies too – so while two people can be covered, only one will be able to claim.
What conditions are (and aren’t) covered?
Many believe a critical illness policy will pay out if you get ANY serious illness and can’t work, but this isn’t true. The definition of ‘critical illness’ can be a minefield and varies between insurers. Some illnesses might not be covered at all and, even if your policy does include, say, certain cancers, it may only be specific stages that are covered. It’s important to read the T&Cs carefully before taking out any policy.
Common inclusions on critical illness policies:
- Certain types and stages of cancer
- Heart attack
- Stroke
- Alzheimer’s disease
- Parkinson’s disease
- Loss of a limb
- Deafness
- Blindness
- Multiple sclerosis
Common exclusions to watch out for
There are often stipulations where a policy won’t pay out at all. This can include the severity of illnesses you need to be diagnosed with – for example, you might have to have permanent symptoms to be allowed to claim on the policy.
The insurer could also withdraw cover for some conditions after you reach a certain age, or if you were aware of symptoms before taking out the policy.
In addition, most policies will also exclude claims where the illness is a result of self-harm, alcohol and/or drug abuse, or from taking part in risky or extreme sports. There are also usually time limits in place too, such as not being able to claim in the first 90 days of the policy or the claim being rejected if you were to die within a month of being diagnosed with a critical illness.
Income Protection
Secure Your Income When You Can’t Work
Income protection insurance pays you a regular income if you can’t work because of sickness or disability and continues until you return to paid work or you retire. Income protection insurance is also known as permanent health insurance.
The amount of income you are allowed to claim will not replace the exact amount of money you were earning before you had to stop work. You can expect to receive about half to two-thirds of your earnings before tax from your normal job. This is because some money will be taken off for the state benefits you can claim, and also the income you get from the policy is tax-free.
You can’t claim income protection payments straightaway if you fall ill or become disabled. You usually have to wait a minimum of four weeks but payments can start up to two years after you stop work. This is because you may not need the money straightaway as you may get sick pay from your employer or you may be able to claim statutory sick pay for up to 28 weeks after you stop work.
How to work out the level of cover you need for income protection insurance
To work out the level of cover you need for income protection insurance:
- start with how much your take-home pay currently is
- take away the amount you would get in state benefits
- take away any work-related costs such as travel, food and clothing
- add on any extra expenses you might need if you become ill or disabled such as extra heating costs or the costs of medical equipment
What affects the cost of income protection insurance?
The costs of taking out income protection insurance are affected by:
- your age – the older you are when you take out the policy, the more you are likely to pay, as your risk of getting ill increases
- your health – if you’re in good health, you will pay less to insure yourself
- your job – if you do a risky job, you will pay more for cover
- hobbies and lifestyle – if you take part in dangerous hobbies or you smoke or drink heavily, you will pay more for cover
- the waiting period – the longer you can wait before you make a claim, the cheaper your premiums will be
- whether you might be prepared to do other kinds of work than your own if you get ill – it usually costs less to take out income protection insurance if you say you will only make a claim if you are unable to do any work at all, rather than just your own job.
Business Protection
Safeguard Your Business: Protect Against the Loss of Key People
Building a business is no easy feat. Behind the shiny brand colours are often blood, sweat and tears, as many business owners give their heart and soul (and likely a few too many sleepless nights!) to growing their company. Sound familiar?
As many of us have learned the hard way, the road to success can be a long, winding one, with many unexpected bumps along the path. So, whatever part of the journey you’re on, whether you’re at the exciting beginning, the sometimes stressful middle or the profitable end, it’s important that you have the right insurance in place to protect the business that you’ve worked so hard to build.
If you run a business, then you will likely already be familiar with employers’ liability insurance, public liability insurance and professional indemnity insurance, but there is another category of business insurance that can give you that added layer of defence to weather unexpected storms. It’s called business protection insurance, and it is well worth taking the time out of your busy schedule to fully understand how it can help you and your company. Ultimately, it refers to a range of products that protect the lives of the important people in your business, so your company’s financial future stays safe, should the unexpected happen.
What is business protection insurance?
Fundamentally, business protection insurance is there to look after your organisation in a time of need and protect its finances in the sad eventuality that someone at the company passes away. It’s a life insurance policy designed for businesses, which pays out a lump sum of money to ensure minimal financial disruption should the unexpected happen.
Death is never a nice thing to think about, but it’s important for business owners to consider what a partner, shareholder, or employee death could mean for the future of the business. Some of the common ways business owners use payouts from business protection cover are:
To protect business ownership and maintain control (shareholder protection)
Should one of the owners of a company pass away, it’s likely that their share of the business would transfer to their loved ones. Business protection insurance provides a payout, should such an event occur, which would allow the surviving business owners to keep full control of the business by buying back the deceased’s share of the business, from their family.
To protect profits (key man insurance)
Often the loss of a business partner can result in a significant loss in revenue, especially if that person was integral to the running of the organisation. At such a time, a lump sum of money, courtesy of business protection insurance, can be exactly what you need to balance out a loss in finances and ensure your business bounces back financially.
To pay off business debts (business loan insurance)
Should a key partner pass away, and business income be hit, a business could suddenly struggle to handle its debts. An insurance payout in this scenario could be a huge weight off the shoulders of the surviving owners – being used to cover debts which are sometimes even secured personally – adding to an already incredibly stressful scenario.
What is shareholder and partnership protection insurance?
The death of a partner or shareholder would come with its own unique set of consequences for your business – often involving the passing of their share in the company to their family. The challenge is then around control, as the deceased’s family could decide to sell their inherited share of the business to a third party, resulting in a loss of control for you and other surviving partners.
Investing in shareholder or partner protection insurance can remove this risk and ensure that you and surviving partners maintain control of your business, by providing a lump sum payout to buy back the share of the business that would pass to the deceased’s family. Shareholder protection insurance also acts to support the best interests of the family who receive a payout to help alleviate financial stress during a difficult time (and most likely the last thing they would want to be doing in the wake of a loss is unexpectedly managing a business!).
What is key person insurance?
As a business owner, you have many valuable assets – for instance, key machinery and equipment – but arguably the most valuable components of your business are your people. The loss of a key employee can harm the financial future of the business in many ways, but this is why key person cover (also known as ‘key man insurance’) exists – to help your company cope financially should a particular person, who is vital for business success, sadly pass away or become terminally ill.
In short, key man insurance would pay out a lump sum amount of money, if a person key to the business, passed away. This cash injection can help to maintain profits, cover debt, rebuild customer confidence and even help fund the processes of recruitment and reorganisation. The policy only covers the specific individuals you elect to cover, and the onus is on you to decide who qualifies as a key person, but it could be anyone who is an important contributor to the success of the business.
What is business loan protection?
Business loan protection insurance can be used to safeguard against the event of a business owner’s death (or if they suffer from a critical illness) when there are outstanding payments to cover, including loan repayments, director’s loans, venture capital loans, personal guarantees, or commercial mortgages.
A lot of businesses rely on loans to help their businesses grow, this is a very normal part of growing a company. However, the responsibility of repayment often rests on the shoulders of a few key individuals. Taking out business loan protection insurance can provide a safety net to help protect the financial security of your business if one of those key individuals were to sadly pass away.
related Services
Here are some other mortgage services that may be of interest.
Buildings Insurance
If you have a mortgage, your lender will insist that your property is protected by buildings insurance.
Details
- Compulsory if you have a mortgage
- Covers the cost of rebuilding your home if it's damaged or destroyed
- Covers accidental damage, acts of god, fire, explosion, flood, storm
- Level of cover must cover the full cost of fully rebuilding your house
- Also covers garage, outbuildings, pipes, cables & drains
Contents insurance
Offering guidance on contents insurance to safeguard your belongings against theft, damage, and unforeseen events.
Details
Benefits can include:
- Accidental Damage Cover
- Stains & Spillages
- Money & Credit Card Misuse
- Domestic outbuilding contents
- Door lock replacement
- Freezer contents
- Jewellery and Paintings
- TV’s, Computers, Tables & Mobiles
Health insurance
It's when you need to make a claim that you realise just how wise investing in health and medical insurance is.
Details
Health insurance offers:
- A choice of private hospitals and clinics.
- A choice of which specialists you see.
- Flexibility, so you can get the help you need in a way that works for you.
Covered by most health insurance policies:
- Physiotherapy
- Mental health
- Cancer
- Acute conditions. This includes any illness or injury that you can recover from.
Landlord's insurance
Helping landlords protect property investments with tailored insurance solutions against risks and unexpected damages.
Details
Landlord Insurance policies can cover against:
- Damage to your property (by the tenant)
- Lost rent and re-letting costs
- Re-letting costs - whilst the property is uninhabitable
- Emergency repairs
- Liability for injury or loss related to your rental property brought by third parties such as tenants, visitors or cleaners.