Alexanders Finance (UK) Ltd
Your Scottish IFA
Helping you plan for the Future
Contact
Alexanders Finance (UK) Ltd
43 Fingal Road,
Killin,
Perthshire,
United Kingdom,
FK21 8XA
+44(0) 1567 820028
Income Protection
Simply having life assurance may not be enough. What if you lose your job or become seriously
ill? You may not be able to work; but you are still alive, your life assurance does not pay
out, but you still have all living costs to meet.
Part of our initial review will include advice on protection insurance including:
- Mortgage payment protection - called Accident, Sickness and Unemployment (ASU) or
Mortgage Payment Protection Insurance (MPPI)
- Payment Protection Insurance (PPI) covers other loan or credit card payment
- Permanent health insurance PHI or Income Protection Insurance - IPP
- Private medical insurance
Almost certainly the biggest fear for working people is losing their job and not being
able to meet their financial commitments. The biggest commitment of all for most people is
their mortgage. Government help for the mortgage payments of the unemployed has been scaled
back, is means tested and if you took out your mortgage since October 1995 - and that includes a
remortgage - you get no assistance for the first 39 weeks - 9 months - of unemployment. After
that the government will only pay the mortgage interest, not the capital part of the
payment.
You do not need to buy a policy from your lender, nor do you have to buy it when you first take
out your mortgage. We may be able to help by finding better value policies.
Permanent health insurance, known as income protection makes up income lost
through illness, accident or disability. Rates vary according to the dangers associated with
one´s job, age, state of health and gender but PHI is thought to be of particular value to the
self employed who do not have an employer to continue paying their salary if they are unable to
work.
Critical illness insurance, a critical illness policy pays out a lump sum if
you are diagnosed with one of a number of specified 'critical' illnesses during the term of the
policy. Many life insurance companies offer policies that cover you for both death and critical
illness and will pay out the guaranteed benefit on the first event to happen.
Loan protection insurance covers the policyholder if they lose their income,
through illness or accident. This type of policy will help with some or all loan
repayments.
Accident Sickness and Unemployment (ASU) can be taken out for any purpose to
protect your income and to give you peace of mind. The benefits normally only pay for one year
on a valid claim if you have an accident, are ill or become unemployed.
Most of these protection policies operate a 'deferred period' which is the period from when an
event happens, that you can claim for, to when the policy starts paying out. You need to check
the policy wordings carefully to ensure the policy matches your financial protection
needs.
Private medical insurance can cover you for private medical treatment and you
can choose to add on extra cover, such as dental cover. You may select the hospitals that you
would want to be treated in close to home. As always the more benefits and the more
comprehensive policy you select the more it will cost.
Long-term care insurance is designed to cover you against the cost of
nursing-home care in your old age and you can pay for it as a lump sum or in regular payments.
Please see our page
Long Term Care for more details.
Life assurance add-ons. Rather than assessing the need for one or more of the
range of policies, some of which overlap, you can add extras to life assurance policies. This
may prove more economical - again we as an IFA can help you to work out the maths. Extras
include critical illness cover and "waiver of premium". This means that if you cannot do your
usual job because of illness or injury, the insurance provider pays the premiums to keep up
your benefits until you recover.