Family protection means having a financial safety net in place so your family remains financially secure should the unfortunate happen Our protection embraces the three important areas of life insurance, critical illness cover and income protection.
At any time, but especially now, in the wake of a pandemic it’s important to consider how your loved
ones might continue to enjoy financial security and their present lifestyle in the sad event of your death or the diagnosis of a terminal illness
What is the purpose of a financial review?
Life insurance helps to give your family financial protection should you pass away at any time within the lifetime of the policy. There are two aspects to life cover - the amount of money you would like to leave behind (the lump sum) and the length of time you want the cover to last. Once that’s been decided, you simply pay a regular monthly amount until the policy ends. In the unfortunate event that you die within the lifetime of the policy and you maintained all monthly payments, the lump sum is paid to your family.
How can the lump sum be used?
The lump sum can be used in any way you choose to help support the living standards of your family. For example, it could be used to help pay off an interest only mortgage, contribute towards the family’s living costs or other monthly outgoings including rent.
Does the lump sum or monthly payment change?
One option of life insurance is what’s called Level Cover. With level cover, both the lump sum and monthly payments remain constant for the life of the policy but do not take into account inflationary fluctuations1. Level cover could be a good option for -
- Helping to maintain the living standards of your loved ones
- Helping with health and living costs in the event that you become terminally ill
- Paying your children’s school or university fees
- Maintaining your mortgage repayments
- Completely paying off an interest only mortgage
1 With level cover the purchase power of the lump sum at the time of payout could be less than the purchase power of the amount originally covered.
Critical Illness Cover
What is Critical Illness Cover?
This is an insurance policy that offers financial protection should you become critically ill during the lifetime of the policy and which pays out a tax-free lump sum that you can use in any way you choose. For example, you may choose to use it to help cover your
health related costs, monthly living expenses or lost income while you convalesce and recover.
How does it work?
When you choose level cover, which ignores the effect of inflation, you decide the amount to be covered and the period of the cover. The amount covered by the policy (the lump sum) and the amount you pay each month will stay the same until your policy terminates. Level cover good be a good option if you wish to maintain the living standards of a loved one.
How can the lump sum be used?
The lump sum may be used to cover the following -
- Your lost salary
- Additional healthcare and living costs
- Rent payments
- Mortgage payments
- School fees or childcare costs
Income Protection Insurance
What is Income Protection Insurance?
This is an insurance policy that will provide a monthly payment in the event that you become ill or injured and cannot work. The policy will pay a proportion of your lost earnings to help cover monthly outgoings while you concentrate on convalescence and recovery.
How will I be paid?
This insurance will provide you with either a fixed monthly benefit amount or a percentage of your earnings following the deferred period 1. The benefit amount can be paid for each eligible claim for a set period of time - from up to 12 months or until retirement 2.
How can the benefit payments be used?
You may use the benefit amount to pay for essential bills such as your mortgage or rent and other outgoings including utility bills and food shopping.
1 What is the deferred period?
2 For how long until retirement?
Help & Information
If you would like further information on how E&G can help you arrange family protection, please call us on 020 8396 0486 or email us at firstname.lastname@example.org.