We’re all familiar with Life Assurance but perhaps less so with “Family Life Assurance” or Family Income Benefit, as it’s sometimes called. Fundamentally the same kind of cover, Family Life Assurance specifically gives your family added peace of mind in times of crisis. This specialist life assurance offers cover for family expenses, even if your mortgage is paid by a new or existing policy. If you were to pass way it is quite likely you’ll want your family to have the same standard of living that they had, when you were there to provide for them. You might also want money for but not limited to, funeral expenses or college fees for your children.
Family Life Assurance can offer a financial lifeline to your relatives and dependants. It pays out a lump sum or a regular income on death or the diagnosis of a critical illness such as cancer, heart attack or stroke. The plan can be taken to cover the number of years that your dependents would need the additional money for, it offers you a comprehensive plan when used as a standalone policy or in addition to one that will take care of the mortgage and other larger debts or commitments.
Of course, not all policies are the same and you need expert advice when it comes to finding the plan that suits your own personal needs. Family Life Assurance offers you the following options:
Level Term Insurance
The benefit that will pay out on this type of policy will remain the same until the policy ends. The premiums can be either guaranteed or reviewed at set periods. Reviewable policies tend to be cheaper at the outset but can be more expensive in the later years.
Increasing Term Insurance
This is becoming increasingly popular as people become more aware of and are concerned about the affect that inflation will have on the money they are insuring. Increasing cover protects against inflation by increasing at a certain rate so that the amount you receive in years to come is relative to the amount you insure today.
Mortgage life insurance is typically bought to cover the repayment of a mortgage, ensuring that if you die before the policy ends, your mortgage will be repaid. It does what it says on the tin. The amount of cover decreases over the term of your policy in line with the outstanding mortgage debt. Cheaper than level term or increasing term insurance, you need to be aware that as an interest rate is set at the outset, often around 7%-8%, there may be a shortfall if your mortgage rate rises to above that rate during the term.
Critical Illness Cover
You can choose to add critical illness cover to any life policy to help protect you and your family if you are diagnosed with one of your insurer’s defined critical illnesses. With Family Life Assurance you can decide if a lump sum or an income would be of more benefit to you and your protection consultant will recommend a policy that will meet your needs and your budget. Many providers include additional payments which are paid if you suffer what is considered to be a critical illness of lesser severity and these payments don’t affect the cover you have insured. Should you subsequently have to make a full claim on the policy, the total amount insured will still be paid.
Children’s Critical Illness Cover
Many insurers now offer this within your premium or for a small additional cost. If your child is diagnosed with a critical illness the payment you would receive could help towards costs of treatment, living cost for you or your partner and loss of income; it provides a real safety net when you need it most. Children’s Critical Illness claims are on a par with those for cancer, heart attack and stroke
Placing Your Policy in Trust
Using a trust for policies such as Life Assurance is not complicated and will mean your loved ones receive payment quickly and easily. They can also help mitigate against inheritance tax as the payment made for a policy that is held in trust does not become part of your estate. Your protection consultant will advise you on the benefits and there is no cost involved.
Insurance can be a difficult subject to talk about as it means we have to think about the unthinkable. It may seem simple to arrange a modest policy with only one aim in mind such as repaying a mortgage, but it becomes a lot more complicated when you want to protect and provide for your family and loved ones. Having a chat with one of Grange Mortgage’s protection consultants with their experience and expertise will mean you can be satisfied that you’ve have a policy that meets your needs and your budget.