Why have life cover?

 

Level Term Assurance

A Level term assurance (LTA) policy pays out a tax-free lump sum in the event of death at any point during the term of the policy. This is an ideal policy for use with an interest-only mortgage or family’s ongoing living costs. The level of cover remains the same throughout the term of the policy. 

Decreasing Term Assurance

A Decreasing term assurance (DTA) or mortgage protection policy is a very cost-effective and is normally used in conjunction with a repayment mortgage. The policy is for a specific term, which could be the term of the mortgage. This provides a tax-free lump sum in the event of death and will usually cover the mortgage balance as cover reduces in line with the mortgage balance.

Critical Illness Cover

​Critical illness cover (CIC) pays out a tax-free lump sum if you are diagnosed with a major illness, including cancer and heart disease during the term of your policy. Actual illnesses covered in a policy may vary between providers.

Income Protection

Income Protection (IP) or private health insurance policy pays a monthly benefit, normally a proportion of your income, in the event you are unable to work due to an accident, injury, critical illness or even stress. This will pay a monthly benefit either up to retirement or until you are fit enough to return to work. As well as being paid a monthly benefit, where this differs from a CIC policy is that illnesses that are covered are not limited to the ones defined on an insurance policy, they are far more comprehensive than that and may be an appropriate way to protect yourself from the impact of an illness or injury in both the short and long term. 

Family Income Benefit

Family Income Benefit (FIB) policy is designed to pay a monthly benefit in the event of death or diagnoses of a critical illness. This is usually set up alongside a mortgage protection policy which clears the mortgage debt whereas the FIB policy would provide a regular monthly income to cover the family’s ongoing household and lifestyle expenses.  Providing you and your loved ones with total peace of mind.

Placing Policies in Trust

Life and FIB policies can be placed in trust to mitigate a potential Inheritance Tax liability. By placing a policy in trust, the proceeds will be paid into the trust as opposed to into your estate. By placing your policy into trust, it ensures that in the event of death, the policy proceeds will go to right person/people at the right time for the right reason. Access to the proceeds of the policy is usually a lot quicker if it is placed into trust.

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Existing Polices

You may have existing policies in place, here at Pearl Mortgage Solutions we can review your policy to ensure it is still the right type of policy for you.

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