What does the state provide for financial protection?
State benefits.
What is meant by a means tested benefit?
Benefit cap based on how much income and/or savings you have.
What benefits are means tested?
- Universal credit
- Income based JSA
- Income based ESA
- Income support
Why was Universal credit created?
To simplify a number of existing benefits.
How are claims made with Universal Credit?
Claims are made on a per household basis and amount payable is based on income and circumstances.
What is the savings cap amount for UC?
£16,000
What is SSP for?
For employees who are off sick for 4 consecutive days or more.
- Paid for 28 weeks
- Subject to income tax & NICs
What is Employment support allowance?
For people who have a disability or health condition that affects how much they can work.
What is attendance allowance?
Tax free benefit for people at state pension age who need help with personal care.
What is Personal Independence payments?
Helps people with the additional costs arising from illness/disability.
What are the 2 elements of PIP?
- Daily living element
- Mobility assessment
What is carers allowance and what is the criteria?
A benefit paid to someone who is caring for the ill or disabled.
- Must be 16+ and spend at least 35 hours a week as a carer
What is jobseeker’s allowance?
- Benefit based of NICs and paid at a fixed rate for 182 days. Helps those looking for work.
What is Support Mortgage Interest designed to do?
Help those in receipt of benefits meet there mortgage payments. Now it is a loan based system where the interest is lower.
How much does SMI cover for?
Interest on the first £200,000 of a mortgage.
What is SMI treated as?
A type of second charge.
What is life assurance designed to do?
Make sure the mortgage is paid off upon death or ensure an endowment is used.
What are the features of a decreasing term assurance?
- Treated as a mortgage protection policy that decreases in line with the mortgage
- Repays the outstanding balance
- Premiums are fixed
What are the features of level term assurance?
- Fixed sum is paid on death and there’s normally a surplus
- Good for one with an interest-only mortgage
- Fixed throughout the term
What is the main benefit from a convertible term assurance?
Includes an option to convert either to an endowment or Whole of life policy throughout the term.
What is Whole of life assurance?
- Pays out on death or whenever death occurs
- Guarantees a pay out
-Protects the family and value of estate from IHT - Can be paid at guarantee premium or investment backed
What is Critical illness cover?
Gives a tax free lump sum on diagnosis of a critical illness. The policyholder must survive following diagnosis for 14-28 days.
What is Income protection insurance?
- Pays a long term income when the policy holder has suffered accident or sickness. Aimed at replacing the persons income.
What is affected by the deferred period?
The premiums. The longer deferred period, the cheaper the premiums will be.
