There are many reasons for Life Cover;

• Do you have a family who rely on your income to survive?
• Do you want to leave a legacy to your surviving family members?
• Have you adequate resources to cover the cost of a funeral in the event of your death?
• Your estate could be subject to Death Duties for which your estate may not have liquid assets to cover the cost of the taxes?
• You may wish to ensure your family has adequate resources to live comfortably in the event of your death.
• Do you have assets with debts attached to them, such as a house with a mortgage? If so, in the event of your death your estate would need to repay this debt before the residual funds could be paid to your loved ones
• You may need life insurance to protect a business against financial loss in the event of the death of a business partner or Key Person to the business.
• Some life insurance policies have a ‘cash in’ value and can also be used as savings vehicles
• You may wish to leave money to charity in the event of your death

Critical illness cover, also known as critical illness insurance, is a long-term insurance policy to cover specific list of serious illnesses covered within the policy. Should the worst happen, it gives a tax-free ‘lump sum’ – a one-off payment, to help pay for your mortgage or rent, debts, or pay for alterations to your home such as wheelchair access should you need it, but it’s your choice how you spend it.

WHAT IS CRITICAL ILLNESS COVER?

Critical illness insurance will pay out if you get one of the specific medical conditions or injuries listed in the policy, but be aware that not all conditions are covered, and the policy will also state how serious the condition must be.

Examples of critical illnesses that might be covered include:

•   heart attack
•   stroke
•   certain types and stages of cancer
•   conditions such as multiple sclerosis

Most policies will also consider permanent disabilities as a result of injury or illness. It only pays out once and then the policy ends. Some policies will make a smaller payment for less severe conditions, or if one of your children has one of the specified conditions.

Critical illness cover could be considered if:

• you don’t have savings to tide you over if become seriously ill or disabled.
• you don’t have an employee benefits package to cover a longer time off work due to sickness.

You might not need it if:

• you have enough savings to fall back on and can adequately cover expenses such as bills, loans, medical costs or a mortgage.
• you have a partner who can cover living costs and any shared commitments, like a mortgage.
• You might already have some cover included in other products or work benefits.

No one likes to think that something bad will happen to them, but each year thousands of people find themselves unable to work due to a serious illness or injury. If you couldn’t work due to a serious illness, how would you manage? Could you 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.

WHAT IS INCOME PROTECTION INSURANCE?

Income protection insurance is a long-term insurance policy designed to help you if you can’t work because you’re ill or injured. It replaces part of your income if you can’t work because you become ill or disabled, usually up to 75% of your income level. It pays out until you can start working again, or until you retire, die or the end of the policy term – whichever is sooner.

There is usually a waiting period before the payments start. You generally set payments to start after your sick pay ends, or after any other insurance stops covering you. The longer you wait, the lower the monthly payments.

It covers most illnesses that leave you unable to work, either in the short or long term (depending on the type of policy and its definition of incapacity). You can claim as many times as you need to, while the policy lasts.

It doesn’t matter whether or not you have children or other dependents – if illness would mean you couldn’t pay the bills, you should consider income protection insurance.

You’re most likely to need it if you’re self-employed or employed and you don’t have sick pay to fall back on.

You might not need income protection insurance if:

• You could get by on your sick pay – for example if you have an employee benefits package which gives you an income for 12 months or more.
• You have enough savings to support yourself – remember that your savings may need to see you through a long period.
• You could take early retirement – if you’re near retirement age, perhaps you could afford to retire early. If you are unable to return to work you may be entitled to take your pension early.
• Your partner or family would support you – perhaps your partner has enough income to cover everything the two of you need.

GENERAL INFORMATION

If you need more than one type of cover it is often possible to combine them into one policy with discernable cost benefits and lifestyle features for doing so.

COSTS

The cost of a policy will vary based on a number of factors, including:

• Age
• Whether you smoke or have previously smoked
• Health (your current health, your weight, your family medical history)
• Job
• The percentage of income you’d like to cover
• The Level of Death Benefit or Critical Illness cover etc required