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If people don’t take out life insurance, critical illness insurance or income protection insurance, then one of the reasons they might give is that they are prepared to take the risk and so they do not take steps to minimise the financial consequences of dying or becoming ill.
The problem with this approach is that, by not looking at appropriate insurances, you are potentially exposing your loved ones to the risk as well. A recent study by insurer LV= found that the average UK worker’s income supports as many as three people – so think about whether your spouse, partner and dependants could manage if your income was taken away suddenly.
The same study also exposed the low levels of savings held by the UK population, with 40% of workers not having an emergency fund of the recommended three months’ worth of average expenditure. This means that large numbers of people cannot rely on their savings to replace a wage earner’s income should the worst happen.
Life insurance can provide sufficient funds to replace the income of a family breadwinner should they pass away. It’s also possible to add critical illness cover to the policy, so that the same sum is paid out should you contract a serious illness.
Income protection policies can be set up to pay a significant proportion of your income, should you be unable to work due to accident or sickness.Moneysworth are experts in arranging life, critical illness and income protection insurance. We are a whole-of-market specialist protection broker and we can search the entire marketplace to find the most suitable product and provider for your individual circumstances. Contact us today to find out more.
One of the main reasons why people might not take out the life insurance and other protection they require is that they think it would be too costly.
In 2017, insurer Sun Life asked people to estimate the likely premium for £100,000 of life cover, and the average estimate turned out to be almost five times the correct figure!
Other studies have suggested that many people believe Covid-19 has driven a significant hike in premiums, but again, this is not the case. With the Covid threat having diminished, and death rates now down around the historic average, there is no reason for the insurers, who operate in a very competitive market, to charge any more than they need to.
Moneysworth can search the entire marketplace for the most suitable product and provider for your individual circumstances. We advise on and arrange life insurance, critical illness and income protection insurance and particularly specialise in finding cover for clients with complex individual circumstances, such as those with medical conditions, or who reside outside of the UK. Contact us today to find out more.
When you think of protection insurance, your first thought might be life insurance. Life cover is certainly important to make sure your family don’t lose out financially, should the worst happen.
Ideally, you should have life cover for the following eventualities:
While life insurance is undoubtedly important, don’t underestimate the importance of critical illness and income protection insurance.
Critical illness insurance provides a lump sum should you contract a serious illness, such as heart disease, stroke, multiple sclerosis and more advanced cancers. This lump sum can then be used to pay off your mortgage and/or to pay medical and care costs and/or to convert your home to make domestic arrangements easier while you are ill.
Another valuable feature of critical illness is that you can also cover your children, so that you receive a sum of money if one of them was diagnosed with a serious illness.
Income protection insurance pays a replacement income should you be unable to work for an extended period due to accident or sickness. Income protection can either be long-term, i.e. it will pay out until the policy ends or you go back to work; or short-term, where the length of time it pays out for is limited to perhaps one, two or five years.
These types of insurance can be of benefit to almost anybody. Anyone can contract a critical illness, and anyone can become ill and need to take time off work, indeed you probably know someone who has been forced to do this at some stage.
If you are single with no dependants, then you might also have little need for life cover, especially if you also don’t have a mortgage. Critical illness and income protection might therefore be a higher priority.
Unfortunately, serious illnesses are far from uncommon. For example, Cancer Research UK says that 1,000 people are diagnosed with cancer in the UK every day. The British Heart Foundation claims that 260 people will need to be admitted to hospital today, as a result of a heart attack. Leading insurer LV asserts that a 30-year old man has a 21% chance of contracting a serious illness before age 70.
Life insurance policies only pay out when you die, or if a medical professional believes you have a terminal illness that will lead to death within 12 months. Cancer Research UK also says that 50% of people diagnosed with cancer live for at least 10 years. This means that people are increasingly likely to survive critical illnesses and to require medical and other assistance for several years while living with the condition.
This is a different type of insurance that normally only covers the direct costs of your treatment. You need critical illness insurance if you want to pay for longer-term care, or to modify your home, or to pay off your mortgage.
This may be true, but remember that they might need to stop work, or at least reduce their working hours, to do this, thus reducing the household income significantly. You might also need specialist nursing care that only a healthcare professional can provide, or you might want to pay for modifications to your home to help with your domestic living arrangements while you are ill. It’s also great to have the peace of mind that your mortgage will be paid off if you become critically ill.
The insurers Moneysworth typically uses all had payout rates of between 87% and 98% for critical illness insurance claims, according to their most recent annual statistics.
Large numbers of people need to take time off work due to illness, indeed you may well know someone who has had to do this recently. Government data shows that, at the time of writing, 2.5 million people of working age in the UK are on long-term sick leave.
Many employers do give you sick pay for a certain time, but how many will carry on paying you for several years? You might need to check your employee handbook very carefully. Even if you know of a colleague who was paid in full for a six-month absence, it is possible that the company did so on a discretionary basis, and that it was not contractually obliged to do so.
One of the best things about income protection policies is that they come with a range of ‘deferred periods’. The deferred period is the length of time for which you need to be off work before the policy starts to pay out. If your employer doesn’t give you any sick pay, you can select a deferred period of four weeks (usually the shortest deferred period available with this type of insurance). If your employer will give you full pay for three months, you can choose a 13-week deferred period.
At the time of writing, state support for those on sick leave is just £109.40 per week, which is clearly a very limited amount. The application process for this benefit can also be very complex.
Income protection premiums can be fairly significant, but this is because the insurer might need to keep paying a significant proportion of your salary for the rest of your working life, in the worst case scenario. Consider that, in return for your premium, you get considerable peace of mind. If affordability is an issue, we can look to arrange a cheaper short-term policy for you, where the payout period might be capped at one, two or five years.
Many insurers will still offer this cover to the self-employed. Also, if you’re thinking that you could still generate an income from the business if you were ill, consider carefully how realistic this is. If it’s a small business and you are a senior manager, it could well be the case that the business is severely affected by your absence.
The insurers Moneysworth typically uses all had payout rates of between 81% and 93% for income protection insurance claims, according to their most recent annual statistics.
Moneysworth are experts in arranging critical illness and income protection insurance. We are a whole-of-market specialist protection broker and we can search the entire marketplace to find the most suitable product and provider for your individual circumstances. Contact us today to find out more.
You may be aware of the Consumer Duty, which was introduced by our regulator, the Financial Conduct Authority (FCA), on 31st July 2023.
The Consumer Duty places new obligations in financial services firms to take positive actions to ensure they deliver good outcomes for their clients.
Moneysworth believes that, in order to ensure our clients get the very best outcomes, we need to explore all possible options when it comes to finding a suitable provider and product.
If this applies to you, then give Moneysworth a try. We cannot guarantee that we can get you covered, but we promise to do our very best.
Other brokers who say they can’t help you might not be protection specialists, or it might be that they are unwilling to take on the extra work involved with a more complex case. Neither of these apply to Moneysworth. Life insurance and other areas of protection are the only areas we advise on.
We have extensive experience of securing insurance for clients with many different medical conditions. We know which providers are likely to consider your application sympathetically. We are not afraid to challenge insurers if we think they have been unreasonable in declining an application, or if they are proposing to charge an unduly large premium, and we have been successful in this respect on a number of occasions.
Contact us today if you’ve been finding it difficult to get life insurance, critical illness insurance or income protection insurance.
The central idea of the Financial Conduct Authority’s new Consumer Duty initiative is that clients should receive “good outcomes”.
When it comes to life and health insurance protection, this is likely to mean that firms will need to take a ‘holistic’ approach, meaning that they will need to consider all of a client’s potential protection needs, rather than perhaps thinking just about life protection in one or two areas.
Similar sentiments have been expressed in several recent trade press articles.
This means considering not only life insurance for the mortgage balance, but also critical illness insurance, as well as some form of income protection or payment protection insurance, as there is a much greater risk of becoming ill during your mortgage term as there is of passing away.
It also means considering all potential protection needs, rather than perhaps just concentrating on life cover.
If an authorised firm decides it doesn’t want to get involved in protection advice, then it has the opportunity to establish an arrangement with a partner firm, whereby insurance leads are passed on to this other firm.
In the new Consumer Duty world, Moneysworth is able to give advice in all areas of protection, including:
One of our particular specialisms is arranging suitable cover for individuals who may otherwise have found it difficult to obtain protection elsewhere.
We have helped large numbers of clients whose circumstances may be a little unusual. For example, they might:
If you wish to find out more about arranging suitable insurance for yourself, then contact Moneysworth today to find out how we can help you.
Moneysworth is well placed to become your protection specialist partner firm in the brave new world of the Consumer Duty.
Since our foundation in 2003, we have become an established and respected name in the protection sector, with numerous satisfied clients and several industry awards to our name.
We invite you to place your trust in Moneysworth’s highly experienced team, who have many years’ experience of the protection market and of helping clients just like yours to achieve fantastic outcomes.
If you want to discuss the opportunities offered by introducing business to Moneysworth, get in touch with us today.
Moneysworth specialises in finding life insurance and other forms of protection for people who might be considered higher risk or who may have been declined when they made applications via other brokers.
This includes arranging cover for people who have tested positive for HIV.
It’s also not that unusual for us to be able to help clients with a history of HIV, as we succeeded here on nine separate occasions in the three-month period from March to May 2023. It should be noted that as many as four different insurers offered terms to our clients in these cases. If you try hard enough, it’s often possible to obtain cover, and you don’t always need to confine your search to one or two specialist providers either.
It’s not just life insurance we can help with either, as we have also been successful in obtaining income protection insurance – policies that pay a replacement income if you can’t work due to accident or sickness – for people with HIV.
Medical advances in this area have been remarkable, and now many people living with HIV can enjoy long, healthy lives. Insurance companies are therefore much more willing to offer cover to people with HIV than was previously the case.
When you apply, the insurer is likely to want to know when you were diagnosed with HIV, and some additional medical details, such as your viral load, CD4 count and any medication you have been prescribed.
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Moneysworth boasts a highly skilled and experienced team who know the best approaches to take when dealing with clients who have a history of HIV and other medical conditions.
We are whole-of-market brokers and can consider all insurers in the marketplace. This means that there is a better chance of obtaining competitive life cover than is the case were you to approach a broker who uses a limited panel of providers.
Contact us today and see how we can help you.
