What 2 things can cause financial consequences for a family?
Death or serious illness.
What covers death, sickness and disability?
Protection policies.
What can protection policies be used toc cover?
- Replace earned income
- Meet IHT liabilities
- Provide medical treatment/care
- Repay debts
- Meet living costs
What are protection policies built to do?
Give people peace of mind and allow them to make own financial decisions.
What are the two factors when assessing amount of life cover needed?
The amount of protection needed upon death AND the amount of protection that a client currently has.
What happens to a mortgage in sole name?
Those that benefit from the estate must pay of the mortgage first.
What happens to a mortgage in joint tenancy?
The remaining survivor will take on the remaining debt.
What happens to a mortgage in tenants in common?
Percentage of share will pass on based on the will but the survivor will have to meet monthly payments.
What policy is used to protect the mortgage?
Life cover, which lenders don’t insist on.
What is underwriting?
The assessment of risk.
What do underwriters also consider during life policy applications?
Health, lifestyle, occupation and environment.
What happens if there’s a greater probability of risk?
Greater premiums.
What should a young single person think about protecting?
Income and illness protection.
What should young couples think about?
Protection of unsecured debts and medical cover.
What should a young couple with children think about protecting?
The event of death (life cover).
What should middle aged people think about protecting?
Medical treatment, long term care needs and IHT planning.
What should those in retirement protect?
death/illness, retirement pensions, care and IHT planning.
What are the 4 prioritisation needs of protection policies?
- Protection in the event of death
- Protecting from illness
- Protection of income
- Protection of the value of money
What other issues should you consider when thinking about protection?
- Any sickpay provided by employer
- Family medical history
- Support from friends and family
- The need for long term care
