Life and Health Insurance
Temporary Life Insurance
Whole of Life Insurance
Key Man Insurance
Shareholder Protection Insurance
Group Life - Death in Service
Group Private Health Insurance
For all forms of cover we are able to approach the whole of the market to establish the best possible rates.
Life Assurance which provides coverage for a limited period of time is called Term Assurance. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is often the most inexpensive way to purchase a substantial death benefit.
Term Assurance can pay a level amount, meaning the sum assured and the premium remains the same for the term of the policy. This may be suitable for short term policies, however if looking at longer term the sum assured value will be eroded by inflation.
The sum assured could be set to decrease in value over the term if it has been used to cover a mortgage or a loan. The level of cover can decrease as the mortgage or loan decreases. This is normally the least expensive of the term assurance options. Normally your premiums remain the same even though the sum assured is decreasing, however the premium will be lower than the with level cover.
You may choose to have a sum assured and premium that increases each year either at a fixed amount or with inflation. This eliminates the negative effects of inflation on the sum assured particularly if the policy is taken out for the long term.
The length of term chosen will depend on your circumstances. If covering a mortgage or loan the term of cover normally matches the term of the mortgage or loan. If your looking for an additional protection for your family you may take into account the age of which your children may no longer be dependent on you, however you need to consider whether you’re planning on having any future children. You may choose a term that is connected to your planned retirement age, however your decision on that may change over time.
We recommended having a longer term of cover as if your needs change and you no longer require cover you can simply cease the policy. Premiums will no longer be payable however please be aware that the no time is there any encashment value to these policies.
It is also important to consider that in the future you may purchase a larger house that may require a higher level of cover at that moment in time. It would be cheaper to take out a higher level of cover whilst of a younger age than to take out an additional cover out at a later date when you are older, and may have medical concerns.
Term assurance can be taken out on a single life only, where the benefits are payable to nominated beneficiaries, your estate, into a trust or direct to the mortgage or loan company. Cover can also be taken out on a joint life basis either on 1st 2nd death.
Jack and Jill have a joint mortgage of £250,000. They take out a joint life 1st death term assurance policy so that if either dies the survivor is able to pay off the mortgage. Under this joint life policy the sum assured with automatically pass to the surviving owner.
Emily and Peter have a joint life 2nd death assurance policy. This cover would not be appropriate to cover a mortgage as both policy holders have to die before the sum assured is paid. This policy is mainly taken out to cover potential inheritance tax. When a spouse passes away inheritance tax allowance automatically passes to the surviving spouse therefore cover would no be required until 2nd death.
It is possible to have the benefits of a term assurance policy paid into a trust for the benefit of your children. In this scenario you would need to involve a solicitor to draw up the trust. You would nominate trustees who would manage the spending of the funds for the benefit of the children.
Is a life insurance policy that remains in force for the insured’s whole life. The younger that you commence a Whole of Life policy, the cheaper it is likely to be.
Is an insurance product, where the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the critical illnesses listed in the insurance policy. The policy may also be structured to pay out regular income and the payout may also be on the policyholder undergoing a surgical procedure, for example, having a heart bypass operation. Critial Illness is becoming less popular due to the complicated terms that apply and the difficulty in making a claim, however there are still providers that offer the cover.
Pays out a capital sum if the policyholder is diagnosed with a terminal illness from which the policyholder is expected to die within 12 months of diagnosis. This cover is not sold as a stand alone insurance but in connection with other cover such as Term Assurance. Some providers offer Terminal Illness with their Term Assurance automatically.
An insurance policy taken out by a business to compensate that business for financial losses that would arise from the death or extended incapacity of the member of the business specified on the policy. The policy’s term does not extend beyond the period of the key person’s usefulness to the business. The aim is to compensate the business for losses and facilitate business continuity. Key person insurance does not indemnify the actual losses incurred but compensates with a fixed monetary sum as specified on the insurance policy. An employer may take out a key person insurance policy on the life or health of any employee whose knowledge, work, or overall contribution is considered uniquely valuable to the company. The employer does this to offset the costs (such as hiring temporary help or recruiting a successor) and losses (such as a decreased ability to transact business until successors are trained) which the employer is likely to suffer in the event of the loss of a key person. The employer pays the premiums and also received the benefits on the death of the employee.
There are three methods to write shareholder protection.
Life of another policy: This method is usually used where there are only two shareholders and it is unlikely that there will ever be more shareholders. Each shareholder applies for a policy on the life of the other shareholder equal to the value to their shareholding within the business. Each of the directors pay the premiums themselves otherwise if the company paid the premiums, it would be seen as benefit in kind and subject to income tax and national insurance. On the death of a shareholder the proceeds are paid to the policy owner who then uses these proceeds to buy the deceased shares from their family or estate. The surviving director thus owns the company outright and the decreased shareholders estate has been dealt with quickly. The reason why this method is only ever popular with companies with two directors is that only two policies need to be taken out. If there were three directors, 6 policies would need to be taken out, and four directors would need 12 policies. Another disadvantage to this method is where there is a significant age gap between directors. The costs of a policy for a a director in his 50’s will be higher than a director in his 20’s.
Company Share Purchase: This can be a fairly complex process due to company law and tax procedures and usually involves the help of tax advisers and corporate lawyers. Essentially the company buys back the shares from the deceased shareholder rather than the surviving shareholders buying them. The company applies for policies on the shareholders equal to their shareholding values. The policies are usually written until retirement age. The company pays for the premiums and therefore receives the proceeds in the event of a claim. As the company pays for the premiums corporation tax relief isn’t available because the policy isn’t set up to meet the loss of profits on death. The proceeds of the policy will be free of corporation tax as they are for capital purchase.
Own life policy held under business trust: Each shareholder has their own policy held under a trust for the value of their shares. The policy is arranged as a fixed term or up until the point of retirement. If a shareholder dies or becomes critically ill then the other shareholders would use the funds from the trust to purchase the shares of the critically ill or deceased shareholders estate. Those shares are then split equally between the remaining shareholders. In order to make sure that the proceeds are used to buy the shares the company must either change their Articles of Association or set out a seperate agreement. This is usually a cross option agreement.
Term Assurance cover paid for by the employer, with the benefits paid out to the individuals nominated beneficiaries, subject to approval. A form of providing benefits to employees.
Health Cover paid for by the employer for the benefit of its employees.
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