Protection Advice FAQ

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What is the purpose of Life, Critical Illness, Income Protection or Health Insurance?

The purpose of any of these insurances is to protect you and your family against any circumstance which reduces your standard of living or to enable you to recover as best and as quickly as you can from such an occurrence.




What type of insurance should everyone have?

Ideally everyone should have life, critical illness, income protection and health-care insurance. However in many cases budgetary constraints make this impossible, it all depends on your own circumstances which is most urgent and appropriate. You must discuss your circumstances with your financial adviser as any miss-steps can severely undermine the situation.




What does a life insurance policy cover?

Life insurance is a way of helping your loved ones and family cope financially when you die. The aim is to cover the loss of your salary or income as it will no longer be received and to clear debts and pay off any mortgage.




When will life insurance not pay out?

The pay out rate for Life Insurance claims is nearly 98%, meaning that in the majority of cases, your family or loved ones will receive the monies expected. However, there are circumstances where a pay out will not be made. These can include: Non-disclosure of any medical conditions, suicide in the early days of the policy, and not providing vital information on the application form, like smoking, or any dangerous hobbies.




Do I really need critical illness cover?

Critical illness cover is often sold alongside other financial products. In some ways critical illness is more financially damaging in the short term than death as all of the same expenses remain, the condition suffered may require further expense such as house conversion. medical appliances etc., and income may be interrupted. For many people suffering a critical illness can mean they cannot or do not want to return to their previous employment or indeed any employment. Critical illness Cover can help them adapt to their new situation without the financial worries which come with it




When can I claim income protection?

If you have an appropriate policy, you can choose a waiting period of between 28 days & 2 years on your Income Protection Insurance. The longer the waiting period you choose, the lower the premium you pay. Ideally, your Income Protection benefit should start as soon as your income is affected.




Why do I need Income Protection?

Some people need Income Protection insurance more than others. The self employed, contractors, Company Directors and those who have occupations that are high risk or that have a low sickness tolerance should really consider taking out insurance.




Is Income Protection insurance worth it in the UK?

Some people believe that as the UK offers a financial safety net for those unable to work, that Income Protection is not needed. However, the sad fact is that the level of support provided is unlikely to be enough to pay the bills. You are most likely to need it if you're self-employed or where you employer does not provide a high level of sick pay.




What type of insurance will protect you if you get hurt and are unable to work?

There are two main insurance types that will help if you are too sick or injured to work . In the former case, you will need some form of Income Protection insurance, whilst this may also be applicable in the case of accidental injury, personal accident insurance also offers protection.




Does Income Protection insurance affect benefits?

Any benefit payments could be affected by monies received from an Income Protection policy. It all depends on the type of benefits you are receiving. Be sure to discuss this with your financial adviser.




Please also see our Frequently Asked Questions on General Investment Advice, Pensions and Financial Advice.