Protecting What Matters: Those dearest to us, and those dependent upon us.
If something should happen to you, the last thing you want is for you or your family to be worrying about money. One of the most important aspects of your financial planning strategy should be to ensure that you’ve made provisions for your family and any dependants in the event of a serious illness, injury, bening unable to work or an untimely death.
Financial planning is not only about fulfilling our own needs and aspirations, but it is also about protecting those dearest to us, and those financially dependent on us. Of course, illnesses and deaths are not things that we like to think about, but failing to protect against such eventualities can have severe consequences for our loved ones, from struggling to pay the mortgage to a potential Inheritance Tax bill.
Here are just some of the policies that need to be considered:
Generally speaking, anybody with dependants or an outstanding mortgage should look into taking out a life assurance policy. At the very least, this should cover any borrowing and ensure the family can keep their home, but preferably it should provide an additional sum to help cushion the shock to your family finances at such a difficult time.
The level of cover should match your specific circumstances, which means it’s crucial to choose the right term and sum to insure. Putting the benefits paid on death into an appropriate trust can be a very useful way of ensuring they are passed on to the intended beneficiaries at the right time. With a trust, the proceeds also won’t form a part of your estate when considering any Inheritance Tax liabilities.
Being unable to work can quickly turn your world upside down. Income Protection policies typically pay out between 50% and 60% of your salary, tax-free, if you are unable to work due to illness or injury. They are an essential form of cover for those with dependants, but the terms and conditions vary. Almost all will only pay out once a pre-agreed period (deferred period) has passed, ranging from three months to a year.
Some policies will pay out if you cannot return to your own occupation. Others pay out only if you are incapable of doing any job. So it’s important that you obtain professional financial advice to make sure the right policy is put in place for your needs. These plans typically have no cash-in value at any point in time, and cover will cease at the end of the term or if premiums stop.
This cover gives you the comfort that, should you be diagnosed with a specified critical illness, your policy would pay out a tax-free lump sum as opposed to an income. Critical conditions include suffering a heart attack, stroke and certain types of cancer – but each policy will have its own definitive list and definitions.
Typically, the proceeds are used to fund paying off a mortgage and any other debts, or they could be used to pay off school fees that are no longer affordable or To support a change in lifestyle or home adjustments.
BEING PREPARED FINANCIALLY FOR ALL EVENTUALITIES
No one likes to think of the worst happening. But we can help make sure you’re prepared financially for all eventualities, so if it does, you and your family are taken care of. We’ll guide you through all aspects of how to protect yourself and your family. Please contact us to find out more.
Who are Vizion Wealth?
Our approach to financial planning is simple, our clients are our number one priority and we ensure all our advice, strategies and services are tailored to the specific individual to best meet their longer term financial goals and aspirations. We understand that everyone is unique. We understand that wealth means different things to different people and each client will require a different strategy to build wealth, use and enjoy it during their lifetimes and to protect it for family and loved ones in the future.
All of us at Vizion Wealth are committed to our client’s financial success and would like to have an opportunity to review your individual wealth goals. To find out more, get in touch with us – we very much look forward to hearing from you.
IF THE PLAN HAS NO INVESTMENT ELEMENT, IT WILL HAVE NO CASH-IN VALUE AT ANY TIME AND WILL CEASE AT THE END OF THE TERM. IF PREMIUMS ARE NOT MAINTAINED, THEN COVER WILL LAPSE.
CRITICAL ILLNESS PLANS MAY NOT COVER ALL THE DEFINITIONS OF A CRITICAL ILLNESS. THE DEFINITIONS VARY BETWEEN PRODUCT PROVIDERS AND WILL BE DESCRIBED IN THE KEY FEATURES AND POLICY DOCUMENT IF YOU GO AHEAD WITH A PLAN.
“The information contained in this article is intended solely for information purposes only and does not constitute advice. While every attempt has been made to ensure that the information contained on this article has been obtained from reliable sources, Vizion Wealth is not responsible for any errors or omissions. In no event will Vizion Wealth be liable to the reader or anyone else for any decision made or action taken in reliance on the information provided in this article”.
 Royal London Policy Paper 33 – ‘Are half a million people paying unnecessary tax on their state pension?’ is available from www.royallondon. com/policy-papers. The analysis is based on the Family Resources Survey for 2016/17, which is a representative sample of nearly 20,000 households from across the United Kingdom.