The reason it’s so close to my heart is because of my daughter, Olive, who was diagnosed with the disease in 2020 at the age of two-and-a-half weeks. The awareness week holds fundraising events across Britain and helps to increase understanding of the condition, which causes persistent lung infections and can limit breathing ability over time.

Being the parent of a child with a long-term illness often reminds me of something many people across the UK experienced during the Covid pandemic: you never know what tomorrow holds.

Despite this, research by Nationwide reveals that only 27% of people have income protection that could help them maintain their lifestyle if they were unable to work because of illness.

One reason so many people don’t have income protection, or life cover, is because they believe several popular and misleading myths around insurance. If you’re wondering: “should I have financial protection?”, discover three misconceptions that could result in you overlooking it, and why they don’t stand up to scrutiny.

1. “Insurance companies don’t pay out”

The belief that insurers will not pay a claim is one of the most common and misleading myths around financial protection. This is far from the truth.

In 2021, for example, 98% of claims made on approved financial protection products from regulated providers were paid out. That’s according to the Association for British Insurers (ABI), which also revealed that insurers paid out a total of £6.8 billion last year.

What’s more, the pay-out rate was not a one-off, as the ABI also reveals that in 2020 it was again 98%, and in 2019 it was 98.3%.

This means that the majority of individuals and families with bona fide protection received a cash payout when they needed it most.

With insurers paying more than 9 in 10 critical illness claims, and more than 4 in 5 new income protection claims, individuals didn’t have to rush back to work for financial reasons, and could instead return when they had fully recovered. Alternatively, they may have received a lump sum that paid for private treatment, allowing them to have surgery more quickly and return to work – fully recovered – earlier.

It’s worth noting that of the 1.7% claims that were not paid out in 2019, the most common reason was non-disclosure of information by the policyholder. That’s why omitting information to reduce your premiums is likely to be a decision you later regret.

Speaking to a financial planner who can recommend the most cost-effective cover that’s right for you is likely to be a much shrewder decision.

2. “I don’t need it”

Another popular myth about financial protection is that it’s unnecessary. While many of us routinely protect our home, car, and pets because we want to receive a payout when the unexpected happens, many people don’t protect themselves or their income.

If you’re one of them, this could result in your family not being able to maintain their lifestyle if you die or are diagnosed with a serious illness. This might mean your loved ones suffer financial hardship and could even be forced to move out of the family home.

Furthermore, an article by the Independent makes for startling reading. It reveals research by Macmillan Cancer Support that showed 83% of people with cancer were an average of £891 a month worse off because of additional living expenses or loss of income.

While your employer could provide sick pay, they are not legally obliged to, and when they do, it is typically for three to six months, after which it’s likely to drop substantially. You may be able to claim Statutory Sick Pay (SSP), however, that’s just £99.35 a week for 28 weeks (2022/23).

This means you will probably rely on savings or investments to prop up your finances, which could significantly reduce your wealth. As you can see, this means financial cover is probably very necessary.

3. “It’s too expensive”

Another common misconception about life cover and income protection is that it costs too much. This is because people often assume it will be more expensive than it might actually be.

This is backed up by Legal & General research, which asked more than 2,000 millennials to estimate the monthly cost of £100,000 life cover for a 30-year-old non-smoker. The cover was for a term of 30 years.

The median guess was £23 a month, with almost a quarter of those asked saying it would be more than £50 a month. In fact, L&G revealed that the actual cost was £7.27.

While the cost of taking out life insurance, critical illness cover or income protection may be less than you thought, you should always ensure that the policy is right for you and that it’s the most appropriate cover available.

Get in touch

This is not a comprehensive list of the common misconceptions around financial protection. If you would like to discuss these or any others you might have heard, and whether cover might be right for you, please email me at a.douglass@grosvenorconsultancy.co.uk or telephone 01793 766 123.

Alternatively, call my mobile on 07525 177 046. Please note that while I offer high standards of service and ensure any plan is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

Please note

This article is for information only. Life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

The post 3 popular financial protection myths and why they don’t stand up to scrutiny appeared first on Alice Douglass.

Whether young or old, you’ll probably know only too well how much pleasure being with loved ones brings. That said, there is another reason I’m so pleased to be enjoying the lighter, warmer evenings.

It’s when a national awareness week is held, and it’s on an issue that’s very close to my heart: Cystic Fibrosis (CF).

The reason it’s so dear to me is that my daughter, Olive, was diagnosed with the disease in 2020, at the age of two-and-a-half weeks. The condition causes persistent lung infections and can limit breathing ability over time, which is why the Cystic Fibrosis Trust’s CF Week is something I’m always keen to support.

The trust’s awareness week, which is held mid-June, raised understanding of the condition by telling the stories of day-to-day life with the condition and included a Wear Yellow Day on the Friday as part of a fundraising initiative.

Caring for a child with a long-term illness not only puts pressure on your time but can also result in lost time at work and additional cost if you have private medical care. That’s why taking cover for your children’s health can be so important, as it could fund medical cost, your time while you care for them, and any lost earnings.

One thing you may not know though is that typically insurance providers offer free children’s cover if you protect yourself against loss of income or death.

Read on to discover the different types of protection policies you could put in place for your children, and why protecting their life and health provides such peace of mind.

There are different types of life cover for your children

Thinking about your own mortality is bad enough but having to consider your children’s death is so much harder. Sadly though, children do pass away, and when this happens having life cover could help relieve financial pressures on you at a desperately difficult time.

There are two different types of cover you could take: a term policy or a whole of life plan.

The former is where you have the cover for a set period, for example up until your child reaches a certain age. The latter covers your child for the entirety of their life. One advantage of a term policy is that it may include a savings aspect, providing your child with a lump sum that they could use later in life, perhaps to buy their first home.

Cover can be taken on natural and adopted children.

You may instead decide to have critical illness cover (CIC)

CIC pays you a lump sum to support your family financially if your child is diagnosed with a condition covered by the plan.

The children’s cover is usually included as part of your own CIC protection, paying a percentage of the amount you are insured for, such as 25%. This means that if you are covered for £100,000, you could receive up to £25,000 if your child is diagnosed with an illness covered by the plan.

Not only is children’s CIC included as part of your own cover, but it’s usually included at no additional cost. It also means your children will be covered for the main two illnesses of heart disease and cancer, as well as other conditions such as multiple sclerosis, blindness and some types of meningitis.

This will depend on your individual cover, so always ensure you check and speak to a financial planner.

Having life cover or CIC could mean you don’t need to worry about money at a distressing time

Children’s life cover typically pays you a lump sum if your child dies or is diagnosed with a terminal illness, which could help with the cost of a funeral or replace lost income while you grieve or care for your terminally ill child.

The money you claim against a CIC could help pay for specialist equipment, pay for private medical care, or again, replace your income while you care for your child. In Olive’s case, for example, it could help fund something as simple as a trampoline, as this is brilliant at helping her boost her lung capacity and breathing.

As a self-employed working mum, I’m able to arrange my career around my desire to be there for Olive, which is why I work two days a week. If I needed to take longer to care for her, I can make provisions to ensure my clients continue to be looked after while I do this.

That said, if you are employed you may not have the same level of flexibility. Remember that while your employer may allow you time to grieve or to look after your children, they have no legal obligation to pay you while you do.

This means that the money provided from your child cover could allow you to take as long as you need to, instead of having to rush back to work due to financial pressures.

If your child has an emergency, CIC could help with the cost of being there for them

If your child is involved in an accident and admitted to hospital immediately afterwards, the cover could provide a lump sum. This could be used to pay for travel costs to the hospital, lost income while you deal with the situation, or private medical treatment.

Your CIC policy may also include the ability to claim money for accommodation if your child is in hospital for extended periods. The length of time will vary from provider to provider.

Get in touch

As cover comes with different stipulations, depending on the provider and the type of plan you decide on, I can help you understand which offers the best protection for your children, and any conditions attached to a protection product.

I can also confirm whether there are any tax implications that need to be considered.

If you would like to discuss child cover for your family, please email me on a.douglass@grosvenorconsultancy.co.uk or call my office on 01793 766 123. Alternatively call my mobile on 07525 177 046.

While I offer high standards of service and will work with you to ensure any plan is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

The post How children’s sickness cover could support you if your child is ill appeared first on Alice Douglass.

It’s funny how we tend to treat life insurance in the same way we treat travel insurance. We only tend to think about it when we’re reminded of our finite lifespan. It could be a huge life event like a relative or friend dying or something as simple as noticing you don’t move as quickly as you used to that leads you to reflect on what would happen if your own life were to end.

Who would pay the mortgage? What would be left for your partner or your children? Who will inherit your belongings, your financial responsibilities, and benefits?

Plenty of people have decided to take out a life insurance policy after seeing somebody close to them go through the awful scenario of having to sell the family home because they can’t keep up with the mortgage or simply the ongoing maintenance costs for the property. Or even less fortunately, being saddled with the debt of the recently deceased family member with no means to pay it. All while trying to process the grief and sadness of losing a loved one.

Actually, life insurance is much more akin to car or home insurance. If you drive a car or own your home, you’ll have insurance in the event that something should happen, and although we don’t treat it that way life insurance is no different.

Do you need life insurance?

If you have:

• Dependents – school age children, for example

• A partner or spouse – who relies on your income

• A mortgage – or other financial responsibilities

In essence, if there is anything or anyone you want to provide for after you die, then it’s a good idea to get life insurance.

Who doesn’t need life insurance?

There are a few scenarios where you may not need a life insurance policy.

• You are single

• Your partner earns enough for your family to live on in the event of your death (and they would not want to stop/reduce working)

• Your household is on a low income and your partner could be eligible for state benefits

You might not be sure whether to get life insurance or not. If that’s you, it’s a sensible idea to get independent financial advice so you can decide with a professional what would be best for your circumstances.

How much does life insurance cost?

It’s no surprise that life insurance, much like other insurance policies can vary depending on your circumstances. Premiums can also vary so it’s a good idea to shop around to make sure you’re getting the best value. An Independent Financial Advisor will be able to suggest options available to you once you’ve both talked through your wishes.

The price you pay for life insurance can vary depending on:
– Your age, health & lifestyle
– Whether you smoke
– The term of the policy
– The amount of cover you need

As an example, the younger you are, potentially the less likely you are to fall ill or die from a medical condition, which means your policy is likely to be cheaper. Another reason to get your life insurance sooner rather than later.

How should I choose my insurance policy?

There really are plenty to choose from and ultimately the best insurance provider is one which suits your needs but how can you make sure you’re taking out the right policy?

There are two main types of life insurance:

Term Assurance policies

These run for a fixed period of time – 5, 10 or 50 years for example. These kinds of policies pay-out if you die during the ‘term’ of the policy (the length of time you are covered for) and doesn’t have a lump sum payable at the end of the policy term.

A whole-of-life policy

These policies will pay out no matter when you die as long as you keep up with your premium payments.

Most comparison sites will be able to give you an overview of different policies to choose from once you’ve entered your information. If you want to make sure you’ve covered everything, it may be worth speaking to an Independent Financial Advisor to figure out the best type of policy and life insurance for you.

Important things to remember

Exclusions

Most policies will have a certain number of exclusions which would also invalidate the policy or that the policy would not pay out for: Sky diving or scuba diving, for example. Some medications will also mean that the policy won’t pay out in the event that you die as a result of side effects or pre-existing conditions if these have not been disclosed. It’s worth checking through the entire policy with care to make sure you’ll be paying for something which will still cover your needs.

Inevitably, we all tend to leave behind expenses, even if just for the funeral. While it can seem a sombre subject that you want to avoid, it’s worth thinking about whether a life insurance policy would benefit you and talking to someone about the best policy for your need if it would.

If you have any questions or wanted to discuss life insurance policies further, you can always contact me and I’ll get back in touch with you. Sites like the Money Advice Service can provide free advice and information about life insurance too. Either way, try not to avoid ticking it off the to-do list if it’s something you’ve been thinking about.

The post Life Insurance: What you need to know appeared first on Alice Douglass.

There are many types and features of life cover policies and it’s only natural to take stock of any policies you may have during a crisis like COVID-19. If you’re worried about what would happen to your loved ones if anything were to happen to you, now is a good time to review any existing life cover policies.

Most life cover providers are still processing claims, in the unfortunate event of bereavement, so it’s a good idea to figure out what kind of cover you have as well as making sure your information is up to date and accurate.

What is life cover?

Life cover is insurance that pays out upon the life assured’s (the insured person’s) death.

The different types of life cover are:

Term Assurance

Family Income Protection

Whole of Life

Death In Service

Term Assurance

Term assurance is life cover that pays out a pre-determined lump sum upon death. If it is a level term assurance plan, the lump sum amount stays the same throughout the term of the policy. If it is a decreasing term assurance plan, the sum assured (the amount paid out) will decrease over the life of the policy. Decreasing Term Assurance Plans are often used to protect capital and repayment mortgages and are often called Mortgage Protection. You can also have an increasing sum assured.

In both Level and Decreasing Term Assurance, the policy has a “term”. This means that there will be an end date to the plan. This may be at a specific age or a number of years for example to tie in with the mortgage end date. The cost of the plan will depend upon the life assured age and the policy term. Any health issues, whether you smoke and family history will also have been taken into account.

Term assurance plans can be structured as joint or single life. A single life would have a single life assured and a joint life would have 2 lives assured. Where it is joint, the plan would either pay out on the first or second death.

Premiums can either be guaranteed or reviewable. Guaranteed premiums ensure that these remain the same throughout the term of the policy whereas reviewable premiums will start lower and tend to increase as the life assured ages. With reviewable policies, as the premium increases, there may be the option to decrease the amount of cover rather than pay a higher premium.

As an example of how much term assurance could cost, level term assurance for a 30 year old male non-smoker of £100,000 with a term of 30 years would cost £6.50 per month (The Exchange, December 2017).

Family Income benefit

Family Income benefit is like term assurance however, rather than paying a single lump sum on death, it will pay an amount annually tax free for the remainder of the policy term. For example, if you had a Family Income Benefit plan with a term of 20 years and an annual sum assured of £25,000 and you died in year 10, the policy would pay £25,000 pa for 10 years until the policy end. The total pay-out would therefore be £250,000.

For example, for a 30 year old male non-smoker Family Income benefit with a term of 30 years with a sum assured of £25,000 would cost £17 per month (The Exchange, December 2017).

Whole of Life Plans

Whole of Life Plans pay out a lump sum on death however unlike Term Assurance, they do not have an end date. Guaranteed Acceptance plans also fall under this heading such as those you see advertised on the TV. These plans are often used to pay funeral costs or to cover inheritance tax liabilities.

Death in Service

Death in Service is life cover provided by employers. This may be paid by your employer or may form part of your benefits package. The cover will be a multiple of your salary and will pay out if you die whilst you are employed by the company (you don’t have to physically be at work when you die).

To Conclude

Life cover pays out an amount or amounts should you die based on specific parameters. Although on face value, it appears to be a simple insurance contract, different policies will have different features and benefits. It is important to speak to a professional who can advise you on the type of cover you have and whether a claim could be made should the worst happen.

If you don’t have cover

If you don’t currently have life cover and you’re wondering if you will be able to take out a policy, most providers are still offering quotes on policies, but are being a little more diligent in their questions around whether you have symptoms of COVID-19 or have had the disease.

Your Life Cover and COVID-19

Either way, it’s worth speaking to a Financial Adviser if you can. They will be able to look at your situation on an individual and household basis and consider your circumstances to offer you the best options available to you.

If you’d like more useful insight on the impact of COVID-19 on various financial areas, click here.

I hope you stay safe and well. Take care, Alice.

The post Your Life Cover and COVID-19 appeared first on Alice Douglass.

I know so many people who insure their pets, their mobile phones but they do not insure themselves. Even people with young families. They do not stop to think what would happen if something happened to them.

Whether or not you need life cover, will depend on a number of factors. The first thing to consider is what you would want to happen should you die.

What do you want to happen should you die?

What you would want to happen should you die is a very important question. Do you want your partner/dependents to be able to pay off the mortgage? Do you want your partner to maintain their current lifestyle? Do you want your children’s lives to have as little disruption as possible? Would you like your funeral to be paid for? If you answered yes to any of these questions, you should ask yourself how this would be achieved.

Is it only the main earner who needs life cover?

You may feel that you only need to cover the life of the main earner. This may be because the other partner earns significantly less, and a loss of their earnings will not have a significant impact on the household income. Or they may provide the childcare. However, life cover should not be discounted in these circumstances. If they died, would you not want to spend more time with your children to support them? This could lead to a loss of earnings. And who would provide your childcare? And how would you pay for this?

If you do not have any dependents or a house, you may feel that you do not need life cover. That a lump sum would not be required upon your death, however, it may be worth considering.

But I have death-in-service Cover

If you have death in service cover through your employer, you may feel that you do not need any additional cover; however, you will need to make sure this is sufficient to cover your mortgage, the loss of earnings, childcare costs and so on. It is also worth bearing in mind that should you leave your employer, there is no guarantee another employer will offer the same benefits, and if any medical conditions arise in the meantime, you may struggle to get cover.

How much cover do I need?

This depends upon what you would want to happen upon your death, and will also depend upon your budget. As mentioned in my previous blog, “What is Life Cover?”, if you are thinking about taking out life cover, it is worth speaking to a Financial Adviser to make sure you get the right cover for you.

The post Do I need Life Cover? appeared first on Alice Douglass.

What is life cover?

Life cover is just that. It is insurance that pays out upon the life assured’s (the insured person’s) death.

There are different types of life cover:

• Term Assurance
• Family Income Protection
• Whole of Life
• Death In Service
• Relevant life cover

I will look into each one in turn.

Term Assurance

Term assurance is life cover that pays out a pre-determined lump sum upon death. If it is a level term assurance plan, the lump sum amount stays the same throughout the term of the policy. If it is a decreasing term assurance plan, the sum assured (the amount paid out) will decrease over the life of the policy. Decreasing Term Assurance Plans are often used to protect capital and repayment mortgages and are often called Mortgage Protection. You can also have an increasing sum assured.

In both Level and Decreasing Term Assurance, the policy has a “term”. This means that there will be an end date to the plan. This may be at a specific age or a number of years for example to tie in with the mortgage end date. The cost of the plan will depend upon the life assured age and the policy term. Any health issues, whether you smoke and family history will also be taken into account.

Term assurance plans can be structured as joint or single life. A single life would have a single life assured and a joint life would have 2 lives assured. Where it is joint, the plan would either pay out on the first or second death.

Premiums can either be guaranteed or reviewable. Guaranteed premiums ensure that these remain the same throughout the term of the policy whereas reviewable premiums will start lower and tend to increase as the life assured ages. With reviewable policies, as the premium increases, there may be the option to decrease the amount of cover rather than pay a higher premium.

As an example of how much term assurance could cost, level term assurance for a 30 year old male non-smoker of £100,000 with a term of 30 years would cost £6.80 per month (The Exchange, July 2025).

Family Income benefit

Family Income benefit is like term assurance however, rather than paying a single lump sum on death, it will pay an amount annually tax free for the remainder of the policy term. For example, if you had a Family Income Benefit plan with a term of 20 years and an annual sum assured of £25,000 and you died in year 10, the policy would pay £25,000 pa for 10 years until the policy end. The total pay-out would therefore be £250,000.

For example, for a 30 year old male non-smoker Family Income benefit with a term of 30 years with a sum assured of £25,000 would cost £17 per month (The Exchange, July 2025).

Whole of Life Plans

Whole of Life Plans pay out a lump sum on death however unlike Term Assurance, they do not have an end date. Guaranteed Acceptance plans also fall under this heading such as those you see advertised on the TV. These plans are often used to pay funeral costs or to cover inheritance tax liabilities.

Death in Service

Death in Service is life cover provided by employers. This may be paid by your employer or may form part of your benefits package. The cover will be a multiple of your salary and will pay out if you die whilst you are employed by the company (you don’t have to physically be at work when you die).

Relevant Life Cover

Relevant life cover is similar to term assurance and death in service. It is a plan that can be used by business owners to insure themselves or their employees (if there are too few to qualify for death in service) with the premiums payable by the company and the benefits paid into trust for the employee’s beneficiary. The premiums are not a benefit in kind and are an allowable business expense.

Conclusion

Life cover pays out an amount or amounts should you die based on specific parameters. Although on face value, it appears to be a simple insurance contract, different policies will have different features and benefits. It is important to speak to a professional who can advise you on the most suitable plan to meet with your requirements.

In my next articles, I will look at the following:

• What is Critical Illness Cover?
• Do I need life cover?
• Do I need Critical Illness Cover?
• Should I review my existing Critical Illness Cover?
• What is Income Protection?
• How Much Cover do I need?

If you would like to discuss your life cover requirements, contact me for a complimentary no obligation initial meeting.

The post What is life cover? appeared first on Alice Douglass.