Insurance

Home Insurance

Home insurance can be split into two cover types – buildings insurance, and contents insurance.

As the name suggests, Buildings insurance covers any damage to the structure of your building itself, such as roof, walls and floors. It also generally covers fixtures and fittings, such as a bathroom suite, and fitted kitchens.

Likewise, Contents insurance covers damage to, or loss of, any personal possessions in the property, such as home entertainment, furniture, and white goods.

These can be bought separately, although most insurance providers also bundle both together. Buying a combined policy from the same insurer can often be cheaper than buying the two separately.

If you own a house with a mortgage, most mortgage providers will insist you have buildings cover in place to cover at least the rebuild value of the house – after all, until the mortgage is paid off, they own a stake in the house, and if it were to fall down, they would be left out of pocket too.

If you don’t have a mortgage, home insurance is often not mandatory, but is still very advisable. Very few houses would have a rebuild value of less than £100,000 – money that an uninsured property owner would have to find themselves if they didn’t have adequate buildings insurance in place.

Contents insurance is not mandatory, but again, we often have far greater value of possessions than we realize (remember it’s not just items like your TV and stereo, it’s all you furniture, clothes, bedding, children’s toys – it all adds up). If any of these things were to be damaged or be stolen, the cost of replacement would fall on you, and you alone.

Please contact us for a competitive home insurance quote.

Life Insurance / Critical Illness

It's not easy thinking about critical illness cover and life insurance; after all, this is insurance cover which you hope you will never need. But stop and consider for a moment what would happen to your family should you die without making adequate financial provision for them. It's hard enough coping with the loss of a loved one emotionally, but if there are also financial worries, it is even harder.

We never think a critical illness is going to happen to us, especially when we feel fit and healthy, but it can and does. This can be added to our life insurance policies at an additional cost.

There are many reasons why it is a good idea to take out a life insurance and critical illness policy. The most obvious is to provide financial security and peace of mind to your family, should you die unexpectedly or you become critically ill. However, there are many other reasons why you should consider taking it out - these include protecting your mortgage, any estate or land you own, and even your business interests.

What is Life Insurance?

The term Life Insurance, in it's day-to-day form refers to an insurance policy taken out against an individual's life - as the name implies.

Just like every other type of insurance, it requires the policyholder to pay regular premiums to their insurance company.

The result of the policy is that, should the holder die, the insurance company pays out either a lump sum of a regular income to the dependants or other nominated persons.

NOTE: Life insurance is also sometimes referred to as life assurance - these two names essentially refer to the same thing.

Types of Life Insurance

Life insurance is used to pay a lump sum or income on the death and/or critical illness of the person assured. This sum of money would be used to repay a debt i.e mortgage or to provide income for a dependent family, partner or spouse.

Whole of Life

This type of policy has no end date and can provide cover for “whole of life”. This type of contract is usually used where an end date is not required i.e inheritance tax planning.

Usually this type of cover is linked to a savings vehicle. These policies usually have some flexibility and levels of cover and premium can be usually be changed over the life of the policy. As there is usually an investment built in to this type of policy the premiums are generally more expensive than term assurance.

Level Term Assurance

A Level Term Assurance (LTA) is structured to pay out a fixed sum assurance if a death happens at any time during the policy.

For example Mr. Smith has a LTA of £200,000 over 21 years and dies after 19 years of the policy being in force. The insurance company would pay £200,000 to Mr. Smith's beneficiaries. Cover will therefore remain the same throughout the term of the policy.

Mortgage Protection

This form of insurance is often taken out in conjunction with a repayment mortgage. During the term of the mortgage the total amount owed to the lender decreases as capital is repaid.

The decreasing term assurance sum assured decreases in line with the amount owing. As such, this is generally cheaper than its level term assurance equivalent.

Decreasing Term Assurance

Term assurance offers a cost effective means of obtaining life insurance and/or critical illness cover, if incorporated, over a specified term.

The sum assured is paid out, if the life assured was to pass away, or be diagnosed with a predetermined critical illness (if included) within the set term.

However, unlike level term, the level of cover reduces over the term of the contract.

Family Income Benefit

Family income benefit is a form of temporary insurance that offers a cost effective means of obtaining life insurance and / or critical illness cover, if incorporated, over a specified term. It provides an income for the remainder of the term.

For example Mrs Jones effects a policy for a benefit of £10,000 per annum over 10 years. If Mrs Jones dies after 4 years her beneficiaries would receive £10,000 per annum for the next 6 years. This type of cover is very cost effective as the level of cover in effect decreases over the term.

For life insurance and critical illness cover please talk to one of our experienced advisers.

This Payment Protection Insurance is optional. There are other providers of Payment Protection Insurance and other products designed to protect you against the loss of income. For impartial information about insurance, please visit the website at www.moneyadviceservice.org.uk