Mon - Fri 09:00-18:00 020 3463 8836

Insurance Protection

How much does your client need in monthly income?

  • What is their average monthly expenditure, including any annually or periodically paid costs?
  • What about any outstanding debts and loan repayments?
  • Do they have money set aside for unexpected expenses?

How would their ability to repay be affected by a loss of income?

  • Your client should include both individual and joint debts.
  • They should consider secured loans such as car finance, mortgage repayments and household goods as well as unsecured loans.
  • Family members may become liable to repay outstanding debts.

What would happen if they suddenly lost their job?

  • Your client should think about what lifestyle adjustments would be required, e.g. entertainment and leisure costs.
  • Would they still be able to pay school and further education fees?
  • What further impact would there be on any dependants they may have, for example caring for elderly parents?
  • What employee benefits would be lost? For example; company car, or private health insurance.
  • 60% of middle income working households would see their income fall by one third if the main earner was unable to work. 40% would see it fall by more than half.

Do they have a backup plan in case of redundancy?

  • BBetween October and December of 2017, 107,000 people were made redundant.
  • What savings does your client have, and how long would these last in covering household expenses?
  • Could they access funds from any investments?
  • Would family members be able to provide support until your client found another job?
  • Voluntary redundancies are usually not covered by unemployment insurance policies, and most won’t start until 3 months after job loss.
  • Some insurers will also protect the value of employment benefits, such as a company car or private health insurance.

Does your client rely on a job for their monthly income?

  • One million workers a year suddenly find themselves unable to work due to a serious illness or injury. Around 250,000 each year leave employment completely due to ill health.
  • Is your client self-employed? How would their business fare in their absence?
  • Women account for half the UK workforce, but over 50% have not taken out individual protection.
  • What other income sources do they have, if any?
  • Do they need to be fit and healthy in order to keep benefitting from these other income sources?

Does their employer provide support for short-term illness?

  • Employers are required to pay Statutory Sick Pay, but only for up to 28 weeks. It’s worth around £89.35 per week.
  • Only 43% of employers offer sick pay provision over and above the statutory requirement.
  • Your client can claim Statutory Sick Pay if they’re employed but unable to work and if their earnings have accrued above £113 a week for at least two months.

How would your client’s finances be affected by critical illness?

  • 50% of those diagnosed with cancer in England and Wales live for more than ten years afterward.
  • If an employee is unable to return to work after 28 weeks, they can apply for Employment and Support Allowance (ESA), which is around £70 per week for the first 13 weeks.
  • Only 33% of ESA claims are accepted.
  • Critical illness policies generally pay out once and conclude immediately afterward.

What provisions have been made in the event of their death?

  • Whole-of-life vs. term-life insurance policies – the former guarantees a payout, but premiums are more expensive.
  • If a joint life policy is appropriate, would it pay out on the first or second death?
  • Do they have mortgage protection to ensure that family members don’t lose their home?
  • Some life insurance policies also pay out upon terminal illness diagnosis.
  • Exclusions can apply to life policies, e.g. death due to drug or alcohol abuse, or existing illnesses.

If seriously ill, how would your client support themselves long-term?

  • According to Cancer Research UK, 50% of people born after 1960 will be diagnosed with cancer at some point in their lives.
  • Nearly 990 new cases of cancer are diagnosed everyday.
  • How would your client meet mortgage obligations if they became critically ill?
  • Would they be able to continue paying car finance or other secured loans?
  • Could savings and investments such as savings accounts, ISAs, and any stocks, shares or bonds be relied upon for the rest of their life?

Does your client’s employer offer a ‘death in service’ package?

  • Death in service packages normally pay between 2 and 5 times an employee’s current salary.
  • Some packages can be linked to an employee’s pension scheme, so employees may only receive a payout if they are signed up to the workplace pension scheme.
  • A payout cannot be assigned to a mortgage, but could be used to help with monthly payments.
Insurance Protection Download

98% of protection insurance claims presented in 2017 were paid out upon claiming2. BOOK YOUR REVIEW UK insures pay out £9.9m every day for protection policies. BOOK YOUR REVIEW £89.35 statutory sick pay is only £89.35 per week for a period of up to 28 weeks. BOOK YOUR REVIEW £68,000 the average value of critical illness claims paid in 2016 was £68,000. BOOK YOUR REVIEW 40% Inheritance Tax (IHT) is applied on assets worth over £325,000 BOOK YOUR REVIEW 8.9 of every 1,000 opposite-sex marriages end in divorce BOOK YOUR REVIEW £33,904 is the annual cost of residential care in the UK, this can rise for more complex needs BOOK YOUR REVIEW £63,224 is the average cost of raising a child between 1 and 4 (discounting private education) BOOK YOUR REVIEW £40,000 Those who receive financial advice accrue an average of £40,000 more than their counterparts BOOK YOUR REVIEW £231,843 According to research, raising a child costs an average of £231,843 BOOK YOUR REVIEW £6,000 2017 studies show that retirement income is more than £6,000 per year higher for those who plan ahead with an adviser BOOK YOUR REVIEW 137m working days were lost due to sickness or injury in the UK during 2016 BOOK YOUR REVIEW 50% of UK citizens born after 1960 will be diagnosed with a form of cancer at some point in their lifetime according to Cancer Research UK BOOK YOUR REVIEW