Category : Protection Adviser

business-protection

Business Protection

Would your business survive if its loans were called in?

Have you thought about how your cash flow could be affected if something were to happen to a director, owner or key employee?

How would your creditors react?
It may be that one of your company directors stands as the guarantor for your company’s loans. If they were to die, or be diagnosed with a serious illness, it could have a severe impact on your business’s arrangements with its creditors and debtors.

Do you know how they would react? If business loans were called in, could your company afford to pay back its creditors and continue trading?

How we can help
We work with businesses like yours, offering advice on how to protect it from the financial impact of unforeseen events.

insurance

Self-Employed lack protection

Self-Employed lack protection

Just 4% of self-employed workers have income protection in place, leaving the majority vulnerable to financial difficulties if they are suddenly forced to stop working through illness or accident.

In its survey of more than 9,000 adults, LV= identified the self-employed as a niche group who would struggle to make ends meet if they stopped earning. This is partly down to the fact that they have no employer’s safety net and little, if anything, in the way of emergency funds.

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Income Protection

Barriers to protection

According to an online survey of 2,000 adults by Royal London, half of those surveyed believe life insurance is essential for someone with a mortgage or dependants and yet only 60% of people with a mortgage have life cover.

While 60% of those surveyed with a mortgage have a life insurance policy, just 29% have critical illness cover and 19% have income protection insurance, suggesting that better education is needed to help make people more aware of the benefits of taking out protection.
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Family Cycle

The value of protection

Buying a new home is possibly one of life’s biggest and most exciting events. It’s also a major financial commitment – one that could be with you for 25 years or more.

Your ability to maintain your mortgage payments relies on a constant income, so how would you continue to make your mortgage repayments if your income was reduced – or stopped? Here we look at two similar scenarios with very different outcomes.
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Adviser Jobs

The business of protection

The business of protection

Every business has a lifecycle; from its early development through to start-up, expansion and, hopefully, maturity and exit. At any stage, though, it’s important to consider how key assets or loans are protected in the event that something risks the ability to continue trading.

Key person protection
Perhaps the greatest asset of a business is its people. Despite this, Legal & General’s latest ‘State of the Nation’s Small and Medium Enterprises’ research found that more than half of the UK’s small businesses think they would cease trading in less than a year if a key employee died or became unable to work. This stark figure highlights the importance of protecting the people responsible for the continuing success or growth of the business.

If your business relies on certain employees, it’s important to arrange protection against the financial loss caused by their death or serious illness.

An insurance policy often referred to as Key Person Insurance can be taken out on the life or health of such an employee. This may be appropriate where that individual’s knowledge, work, or overall contribution is considered uniquely valuable to the company. It can cover the costs or losses that may be caused by the loss of that person.

Business loan protection
After the initial whirlwind of setting up a business passes and thoughts turn to growth, the business owners might choose to borrow money to fund its expansion. In fact, the research from Legal and General shows two thirds of businesses have some form of borrowing.

The most common type of borrowing taken out over £50,000 is for business loans, overdrafts and Directors Loan accounts.

Most types of business loans can be protected with a policy that provides a lump sum to cover loans and other credit facilities if a business owner dies, or in some cases becomes seriously ill (if critical illness cover is included).

Share protection
Once a business is more established, a share protection policy might be appropriate because it can help cover the value of an owner’s share of a business. If an owner dies or is diagnosed with a critical illness, share protection written in trust can provide the other business owners with enough cash to buy out the shares and continue to run the business.

Whether you’re just starting up, or looking to expand your business, we can advise on a range of business protection options that might be suitable. Please get in touch.

Life Insurance

Peace of mind for the cost of a coffee

Peace of mind for the cost of a coffee

Many of us pick up a morning coffee on the way to work – it’s a little bit of luxury to start the day for just a couple of pounds. But did you know you could provide something even more satisfying for you and your loved ones for less than the cost of that coffee?

Peace of mind
Protection insurance (or, more specifically, life insurance, critical illness cover and income protection) should be considered essential – especially if you have a mortgage, or people who depend on your income.

A life insurance policy can provide much-needed funds if you’re no longer able to work through illness, injury, or worse. There are even some policies that will also cover you for unemployment. Cover provides peace of mind because you know you and your family will be financially supported if the unexpected happens – and cover might be cheaper than you think.

When it comes to a claim…
If you’ve declined the offer of protection insurance in the past because you don’t believe your insurer would pay out, think again. According to the Association of British Insurers (ABI), 97.3% of all protection insurance claims paid out in 2016, totalling £4.7bn. That’s around £13m a day paid to households hit by the emotional and financial distress and disruption that an unexpected accident, serious illness or death can cause.

Things change – and so should your cover
Even if you already have one or more of these types of plans in place, it’s still important to regularly review your cover levels. Personal circumstances can change and you should make sure your level of cover remains appropriate.

Choose security
Next time you’re in the queue wondering whether to go for a flat white or hazelnut mocha, why not consider a third option and choose long-term financial security for you and your loved ones. The satisfaction it can provide you is far greater than that from a coffee.

Based on latest data, a 35-year-old non-smoker looking for £250,000 decreasing life assurance and critical illness to cover a 25-year repayment mortgage, could pay a premium of £58.54 per month, equivalent to £1.88 per day based on a 31-day month.

Figures correct as at 7/8/2017

If you’d like more information on what sort of protection insurance would suit your circumstances, please get in touch.

Family Cycle

Protecting your mortgage repayments

Protecting your mortgage repayments

We think protection advice is imperative when you have a home or family you want to protect. So, talk to us about a mortgage and we’ll talk to you about life cover.

Buying a house could be one of the biggest financial commitments you’ll make: getting a deposit together
can wipe out your savings and paying your mortgage will take a chunk out of your income. So how would
your family continue to meet this commitment if you stopped earning?

When taking out a mortgage, it’s essential to consider how you would continue to cover your mortgage
payments if you fell ill or died unexpectedly. There are a number of ways you can do this:

Life Insurance
If you died suddenly, a Life Insurance policy would pay out a cash sum to your dependents. They could
use this to pay off their mortgage and keep the roof over their heads.

Mortgage Payment Protection Insurance (MPPI)
Also known as Accident Sickness and Unemployment (ASU) cover, MPPI covers your mortgage related
repayments if you can’t work because of redundancy, accident or ill-health. Benefits are usually paid for 12
months although some providers offer 24 months’ cover.

Critical Illness Insurance
Critical Illness Insurance pays out a lump sum if you’re diagnosed with a specified critical illness such
as cancer, stroke or heart attack. You can use the cash payout to clear your mortgage, pay for medical
treatment, take time to recuperate or anything else you choose.

Income Protection
Income Protection can replace part of your income if you’re unable to work for a long time due to illness
or disability. It will pay out until you return to work or the policy ends – whichever happens first. Income
Protection plans usually have a waiting period before the benefit becomes payable.

Choosing to protect yourself

When you take out a mortgage through us, we’ll ask if you want to take out protection as well. What’s more, we will analyse your lifestyle and any protection shortfall and recommend a protection plan that will help protect you and your family from the financial consequences of serious illness or death.

Plugging the protection gap

Plugging the protection gap

If you’re one of the increasing number of people who’ve become self-employed in recent years, you may have found the switch has left you without the employee benefits you previously took for granted.

Making the change from employed to self-employed is a big step and it’s one more people are taking.
The number of self-employed people in the UK now stands at 4.80 million, representing 15% of the working population.

But while some may find they can earn more as a result, they might overlook the importance of replacing lost employee benefits like income protection and life insurance.

Death in Service
Many employed people automatically benefit from life insurance arranged on their behalf by their employer. This would pay a multiple of their annual salary were they to die while still employed, which could then be used to pay off a mortgage or maintain their family’s lifestyle.

Some employees receive a proportion of their salary for a period of time if they become unable to work due to illness or injury (over and above statutory sick pay levels) and may benefit from access to private medical treatment.

Clearly, moving from employment to self-employment would mean these benefits cease, and potentially
leave a protection ‘gap’.

Mind the gap
Fortunately, the benefits you may have received automatically as an employee are also available to you as a self-employed individual – and they may be more affordable than you think.

Income protection insurance will pay you a monthly income if you become unable to work through illness
or injury. Self-employed workers should consider this an essential piece of protection because it can help
prevent your family suffering financial hardship and allow you space to recover more quickly without the
burden of financial worry. Many insurance companies also provide support for customers to help them return
to fitness as quickly as possible.

Life and critical illness plans can be individual plans or combined. Life insurance will pay out a lump sum or
a regular income to your dependants if you were to die during the term of the cover. Critical illness plans pay out a lump sum if you are diagnosed with a specific illness. Both can help secure your family’s financial future.

Private medical insurance (PMI) may be considered less of a priority than either income protection or life
insurance, given the treatment you are entitled to via the NHS. For those seeking to replicate all the benefits
they may have enjoyed when employed, there are a range of policies available at varying price levels. If you are interested in PMI we can introduce you to our PMI referral partner.

Are you covered?
If you’re self-employed it’s easy to make sure your employment status doesn’t put your long-term financial
security – and that of your family – at risk. Get in touch to discuss your protection options.