Life and Critical Illness Cover
What is Life and Critical Illness Insurance?
Life and Critical Illness cover pays a tax free lump sum either on death or disgnosis of one of the specified illnesses on the policy. There is no limit to the amount of life cover you can have but it will be subject to medical underwriting limits.
You may want to consider cover such as:
- Decreasing Mortgage Cover - Life and/or Critical Illness Cover to pay off your repayment mortgage. The cover deceases alongside your mortgage and is therefore more cost effective than a level policy.
- Family Income Benefit - A policy that pays an annual tax free income for a set term to replace your income if you were to die to ensure your family aren't struggling financially in the event of your death.
- Level Protection Plan - A tax free lump sum on death or critical illness which could be personal cover for yourself to ensure the best treatment can be afforded or adaptations to the house done or alternatively a lump sum paid to your family in the event of your death to ensure they are financially secure without you here.
- Whole of Life Cover - This may be more appropriate if you wish to ensure whatever age you pass away that you leave a legacy for your loved ones, it can also be used for funeral expenses or alternatively to plan for inheritance tax liabilities.
How is the cover set up?
When a policy is taken out, you will be asked about your lifestyle and medical history and it is vital that the answers are as accurate as possible. This information will then be shared with the policy provider and the medical underwriters so that they can asses whether your medical history means the policy will get a 'rating' or an 'exclusion'.
If the policy has a rating it means the cost will increase but unless it has an exclusion, they are still covering you for everything. If the policy has an exclusion, this means they will not pay out the sum assured if a claim is made against this excluding illness.
Once the policy is in force, you will pay monthly or annual premiums to cover the cost of the policy. If you stop paying the premiums, the policy will lapse and you will lose the cover. If you then need to set the policy back up then you will need to go through the underwriting process again.
What about Trusts?
It may be appropriate to put your policy into a trust and if this is the case our advisers will guide you on which type of trust to use, guidance on how the trust works, the trustees and the details of the beneficiaries alongside any letters of wishes you may need to do. You and your trustees may also be invited to a Trustee Integration Meeting to ensure they are aware of the duties of a trustee so that they are prepared if the worst happens.
If you have existing cover in place it is vital that this is reviewed on a regular basis to ensure that it is set up in line with the latest medical advancements but that it is also set up in the correct way with areas like Trusts to consider.
Contact our Main Office now on 01942 889883 to speak to one of our dedicated team about your protection needs.