If Financial Planning were a competitive sport what division would you be in? For the sake of discussion and thought, the following maybe an idea as to how leagues would be divided and the criteria that would be required to obtain a place in each division.
Division 4 criteria
House contents cover. Buildings cover. Mortgage protection.
Division 3 criteria
All of the above plus additional life cover to protect household bills & Whole of life cover to pay for funeral expenses.
Division 2 criteria
All of the above plus savings ( 6 months salary ) in the event of emergencies. Critical illness cover. Family Income Protection plan, Basic Will.
Division 1 criteria
All of the above plus Long term savings for retirement, weddings etc. Redundancy cover.
All of the above plus Permanent Income Protection, Estate planning. Private Medical Insurance.
The above of course will depend on each persons situation and circumstances, however it would be difficult to argue, that most people would not benefit from most of these plans being in force on their behalf. Certainly if an employer offered these benefits to you and suddenly took them away, you would be pretty upset.
Important Financial Planning Products
Mortgage protection: Pays a capital sum to clear a mortgage debt in the event of a death. The proceeds are paid free of tax.
Critical Illness: Pays a capital sum of money in the event of being diagnosed with a specified critical illness.
Redundancy cover: Pays an income in the event of being subject of a compulsory redundancy.
Contents and Buildings Insurance: Replaces your home or contents in the event of an incident, e.g. Fire, Burglary or Flood. Many additional options can be included.
Disability and sickness cover: Pays an income in the event of being away from work because of sickness or disability. Will pay for one or two years from commencement of claim
Permanent Income Protection: Pays an income in the event of being off work owing to sickness or disability. Will pay an income up to the time you return to work or retire whichever is the earliest. Income can be indexed linked.
Life cover (Term assurance): The mortgage is not your only monthly bill. This pays a capital sum in the event of a death. The policy term is determined at the outset of the plan. The policy is paid free of tax. However the capital sum could be subject to tax from any interest you receive if you invest the proceeds
Family Income Protection: Pays an income, free of tax, for a specified period (normally up to when a child is no longer financially dependent). Perfect cover for a family with young children. The income is paid free of income tax.
Whole of Life: Pays a capital sum, free of tax, generally to cover funeral expenses. As the name suggests this plan lasts the lifetime of the life assured. Can also be used to pay for any Inheritance tax that my be due.
50 Plus Life Cover: A whole of life plan designed for the over 50’s. No medical
underwriting required. Guarenteed acceptance irrespective of any medical conditions. If you are having difficulty being accepted for life cover owing to your health, this could be the solution for you.
Estate Planning: Is your estate sufficient enought to be subject to Inheritance tax? Can your home be used to pay for residential care? Have you considered the implications if your spouse dies and remarries? Would your own children’s inheritance be at risk? Proper estate planning can ensure your estate ends up where you want it to.
Making a Will: 70% of the UK population have yet to make a Will. Do you really want to have the state dictate how your hard earned assets are distributed?
It is surprising how little we value ourselves when considering life or sickness cover. And at the same time willing to pay for our mobile phones or washing machines to be protected.
Often we depend on our employers to arrange some protection and think this will be sufficient. Sadly many still believe the state will provide.
It is not the most exciting planning you will make, like perhaps the family holiday, but surely it is worth some of your time to consider the security of your lifestyle and your families future in the event of a major disaster, which does not include the television breaking down.
For more information you wish to discuss further please contact:
Tel Number: 01708 640855
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