Have you reviewed your Life Insurance and Critical Illness cover yet?

November 24th 2020

The pandemic has focussed many of our client’s minds on the adequacy of their Life Insurance and Critical Illness arrangements, as well as Income Protection should they be unable to work due to sickness or accident.

Income Protection is often overlooked with many clients not realising that part time workers who earn less than £118 a week are not eligible to receive statutory sick pay and for those that are eligible, statutory sick pay is less than a fifth of weekly average earnings at around £95.00 a week*.

Having access to the whole market for these products, as well as Private Medical Insurance, makes us ideally placed to advise you on the options available to you and will enable us to work together to create an affordable and effective solution to your needs.

If you have not already done so, we urge you to contact us now to arrange a comprehensive assessment of your requirements and to review the suitability of any current arrangements.

Why is it really important to invest time in a review?

Many clients find that their circumstances have changed significantly when we review their arrangements even if it feels to them like these were put in place fairly recently. The most common changes in circumstances we see include growing families, bigger mortgages, increased Inheritance Tax liabilities, separations and also wider and changing business needs.

What can I expect from the review?

Once we have thoroughly understood your current circumstances and requirements we will put the full range of protection policies at your disposal. These include Life Insurance, Inheritance Tax Protection, Income Protection, Critical Illness, Keyman Insurance, Shareholder and Partnership Protection, Family Income Benefit and Private Medical Cover.

Read on for an overview of the key protection products and remember to think about both your personal and your business needs where appropriate.

Life Cover – Pays out when you die.

How would your family manage without your income if you were to die?
Will the policy proceeds completely cover your outstanding debts & liabilities?
Could your business continue successfully without replacing you or another key member of staff?
Does the policy expire long before your retirement age?
Should the policy be written in trust?

Income Protection – will pay out after a deferred period (usually 3 or 6 months or when employer’s sick pay stops) should you be unable to work due to illness or accident. The benefit level can be up to 65% of your annual salary/earnings, is paid tax free, and should continue until retirement age or your return to work, whichever is the sooner.

Main things to consider :-

Is the benefit level sufficient to cover your monthly outgoings?
Does it cover you for your hobbies? Important as some sports are excluded.
How long does it pay out for?

Critical IIIness – pays out on the diagnosis of a critical but non-fatal illness such as stroke, heart attack, cancer, total disablement etc. The payment is tax free and therefore ideal to repay a mortgage early or make adjustments to your home depending upon the disability suffered.

Main things to consider :-

Does your existing policy cover all the new conditions for which cover is available via more recent policies?
Is the sum selected adequate to cover all your debts?
Did you take this out when a smoker which you might now not be priced as being?
Business cover – 52% of the UK’s small businesses think they would cease trading in less than a year should a key member of staff die or suffer a critical illness.

Private Medical – this gives you your choice of consultants, hospitals and treatments. It reduces waiting times and allows access to specialist drugs and treatments that may be too costly to receive on the NHS.

Generally the longer a client waits before taking out cover the higher the premium will be as the price for these products is largely based on age. For families, financial protection really can help give reassurance to the individual and those they leave behind at the most difficult of times. It is also an essential part of business planning where protection can be put in place to reduce the impact of the loss of key staff through illness or death.

Please call Lycetts Financial Services directly on 0845 671 8999 and ask to speak to one of our advisers to arrange your review now or send an email to info@lycetts.co.uk

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