Anyone who has a family or children who are financially dependent on them should have life insurance. Life for your family without the income of the main earner would be very different and can be made a lot easier with a bit of planning. In addition, the cost of life cover has come down in recent years, as medical care improves and people live longer. Firstly, there are term insurance policies, which are designed to provide a level of life cover or critical illness cover over a set period of time. They are usually the least expensive. Secondly, there are whole of life policies.
These will usually run continually until death, as long as you continue to pay the premiums, and therefore are guaranteed to pay out. After a few years they attain a surrender value so that they can be cashed and a proportion of the premiums returned.
Not so well known in continental Europe but common in the UK, this type of insurance is similar to term life insurance but the difference is that it covers the events that might not kill you but could cripple you or leave you unable to work at all. The policy usually covers a specific range of illnesses such as heart attack, MS, blindness etc. The most common claim for this type of insurance is for people who contract cancer.
The insurance is designed to provide you with a capital sum in the event of diagnosis of a critical illness. This would then give you some breathing space financially at a time when money is the last thing you want to worry about. In many cases the money would be used to repay a mortgage, for instance.
The complete list of illnesses covered by one company is as follows:
Some companies provide sick pay and will pay your salary if you are unable to work but most companies will not pay this for very long, after which time it might be necessary to support yourself. If you are self-employed then you will not have sick pay.
In either event, it is possible to insure yourself (and your earnings) against the risk of long-term sickness or accident, which prevent you from working.
Premiums are determined by your age, earnings and occupation.
Inheritance tax planning can be very complicated and usually involves the advice of a solicitor, an accountant and a financial advisor. Once you have sought advice from the first two about mitigating your liabilities then it might be to your advantage to then speak to a financial advisor about having a life insurance policy to pay the tax bill.
Once the likely potential tax bill has been calculated then it is possible to write a whole of life insurance policy which will pay out on death and the intention is that it provides enough money for the beneficiaries to pay the tax bill.
Another simple way of planning for inheritance tax liabilities is to ensure that your investments are held in the optimal fiscal framework for your circumstances. Some investments can eliminate inheritance tax altogether. Along as you take advice when making the investment then you could save your beneficiaries a lot of money.
Businesses sometimes recognise that their success is very dependent on the contribution of one or more ‘key people’. These people have a disproportionate effect on the profits of the company, either due to their fantastic business acumen or their specialist technical knowledge. In some cases their persona may embody the public image of the company and without them a company would have to reinvent itself.
In order to protect the value of that company (i.e. the value to shareholders, employees and even customers) in the event of death of such a person it is necessary to insure them. The aim is to provide working capital at a difficult time in order to get the company back in a financially strong position.
We need to ensure that the company would have sufficient funds to enable it to react quickly and decisively to avoid major short term and long term losses in the event of death or permanent disability of such a key person and these people should be insured accordingly, with the company being the beneficiary of any funds. In order to do this, the company needs to place a value on that person, to determine the funds that would be needed at such a time.
In many companies the nature of the work is specialised and requires an experienced knowledge of the marketplace or industry, therefore, the loss of certain individuals could have a fundamental effect on the whole of the company’s profit. It is necessary for the directors or partners of the company to arrive at an agreed sum which would be needed in such circumstances and this can be done with help from an experienced financial advisor, after discussions with the company accountant. A life policy for this amount is established.
The premiums can be offset against company tax in France and the UK.
All banks insist that you have life insurance to repay your debt in the event of death and most banks automatically offer their own life insurance as part of the whole package. However, you can usually insist upon using your own life insurance policy, which we can provide you with, and you could halve your monthly insurance premiums.
This is a simple to way to save money or to improve your benefits at no extra cost. We can usually find you an equivalent policy at a lower cost and over the term of a mortgage the cost-savings add up.
If you are unable to obtain life insurance cover due to the special nature of your occupation then we should be able to find you a policy. We can insure people who work in occupations in which it is difficult to accurately evaluate the risk, such as a yacht captain who may be travelling at sea to many parts of the world, or people who work in very risky situations, such as a racing driver.
Cover can also include repatriation and disability which leads to being unable to carry out one’s usual occupation.
If you are unable to obtain cover because of your particular job (or pastimes) or would like to compare premiums with an existing policy (we often win business on price alone) then please call us.