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Critical illness cover protects you when you are diagnosed with a serious illness, such as cancer, or when you suffer a heart attack or stroke. The lump sum payout can provide valuable financial support and could be used to pay household bills, cover loss of earnings, pay for private medical treatment, or even pay off your mortgage. There are many reasons why you would look at taking out this policy.
A life insurance policy pays out a lump sum of money in the event of death or terminal illness. There are people that may not need life insurance, but I think that it’s always important to double check if it is needed so that no one is left in the lurch! If your children, partner, or any other relatives depend on your income to cover the mortgage or other living expenses, then it would be highly recommended that you have a look at a life insurance policy as it will help provide for your family in the event of your death.
There are many reasons people take out life insurance policies. Some of them are but are not limited to:
An income protection policy will provide you with a monthly income to help to support you if you’re are unable to work because of an injury or an illness. It provides a monthly benefit payment of 75% of injured/ sick workers income. A standard income protection policy will include income replacement. A benefit is paid (usually monthly) of 75% of the workers income for injuries and illness that has been sustained both at work and at home..
If something happened to you, would you be able to survive on savings or on sick pay from work? If not, you’ll need some other way to keep paying the bills and you might want to consider income protection insurance. There are many reasons people take out income protection policies. Some of them are:
Building and Contents
Are you wondering whether you need buildings insurance? If you own your own home, you’ll need to have buildings cover just in case your home gets damaged and needs a repair. You would normally have to take it out if you have a mortgage or even if you are a landlord as it your responsibility and not your tenants. It’s not compulsory, however if you own your own home, this sort of insurance should be a top priority as it covers you just in case! Buildings insurance would be for things like permanent fixtures and fittings i.e. kitchens and bathrooms.
Are you also wondering whether or not you need contents insurance? Think about how you would cope if you lost all your valuables due to a robbery or a fire. We personally think contents insurance is very important as all your belongings could be gone for whatever reason in a flash and you may not have the money to replace them. Contents insurance would be for things like stuff you keep in your home, like furniture, jewellery, TVs, and other personal belongings.
Frequently Asked Questions
If you have dependants, e.g. school-age children, a partner who relies on your income, or a family living in a house with a mortgage that you pay, a life insurance policy can provide for them if you die.
You can’t rely on the government to take care of your family, as the money they would get from the state is much lower than you’d probably expect. If you want to provide for your family financially if you die, have a look at getting life insurance.
If you have an employee package that includes a ‘death in service’ benefit, this will cover you for a multiple of your salary and you might not need additional life insurance. You would need to decide whether this policy is enough to cover your needs and whether or not you need an additional life insurance policy.
Bear in mind if you stop working for that employer, you won’t be covered under their policy anymore. So the death in service policy can vanish into thin air in a split second if you lose your role which would then means no one is covered and we would then recommend looking at starting a new policy which could be costly at the time depending on different factors i.e. age/health etc.
The price you pay for a life insurance policy depends on a number of things, including:
- Your Age
- Your Health
- Your Lifestyle
- Whether You Smoke
- The Length of the Policy
- The Amount of Money You Want to Cover
How much you pay each month will depend on the policy and your circumstances. Income protection insurance would normally cover a wide range of illnesses and situations and has the potential to pay out for many years. Every provider is different.
You don’t normally have to pay tax on income protection benefits because as an individual you’ll have already paid for it from post-tax income. This means you’ll have already paid tax on the premiums. If you are self-employed and have a self-employed income protection policy, you may be able to use your business to pay your premiums, generally out of pre-tax income as an allowable expense against corporation tax.
Critical Illness Cover
Most people feel that life insurance will cover the needs of their family if they were to die prematurely, but suffering from a critical illness or long-term disability can be just as devastating financially. So, if you have dependents relying on you for an income then critical illness insurance is worth it.
In the event of critical illness, you can claim only one pay-out during the life of the policy.
If you get a serious illness out of the blue (different policies cover different illnesses), a critical illness policy will pay out a tax-free lump sum.
Building and Contents
This type of insurance covers loss or damage to all the valuable things in your home which are not part of the structure or the building such as jewellery, TVs, Laptops, and more.
Buildings insurance covers the cost of repairing any damage to the structure of your property. Garages, sheds, and fences are also covered, as well as the cost of replacing items such as pipes, cables and drains. Your insurance should cover the full cost of rebuilding your house if need be.