Life Insurance

Life Insurance

Life Insurance is designed to pay out a tax free lump sum should you die or be diagnosed with a terminal illness. The money is often used to clear a mortgage or to give peace of mind that their family will be taken care of financially in their absence.

Often taken out with life insurance is Critical Illness Cover

When people are asked what they understand about Critical Illness Cover they are sometimes unclear as to what it does. Critical Illness Cover was created to pay out a tax free lump sum should you be diagnosed with a serious illness that you are not necessarily going to die from but can be very life changing.

There are 3 reasons why people do not take out Critical Illness cover;

1. They do not know that it is available to them.

2. The “it will never happen to me” philosophy.

3. There are not enough funds to pay for it at the end of the month after all the bills are paid.

Which one applies to you? 

Why should you take out Critical Illness Cover?

At Bright Advice, we take the individual circumstances of a client into consideration and tailor fit a policy to suit their exact needs and requirements, while still making sure that it is affordable to them. * Statistically 1 in 2 of us are going to come face to face with cancer and protecting yourself against this scenario if you have a mortgage or children dependant on you, is very important to consider!

*Cancer Research UK , Accessed May 2019. 

A seldom talked about policy called Family Income Benefit

Where as with a standard life insurance policy pays out a tax free lump sum, the Family Income Benefit Policy is designed to give a tax free replacement income from the point of death until the policy expires.

How do we explain the importance of this policy?

Imagine that in the corner of your lounge you have a machine that dispenses £20,000 (or the amount you earn) every year…. Would you insure that machine to make sure it keeps working? Of course you would! To your family, you are that machine. Family Income Benefit is a policy that replaces your ongoing income in the event of your death.

Income Protection

In essence Income Protection is buying your own sick pay. It is designed to give a tax free replacement income (around 60% of your net pay) in the event that you can not work due to any accident, sickness or disability.

If your employer already gives you sick pay, this policy will provide a continued income from the point your sick pay stops to the point you are either better, the policy has expired or you have died.