Tim’s Income Protection
After searching for income protection on the internet Tim came across the Drewberry Insurance website. After seeing how many different options there were to choose from Tim decided to call Drewberry and spoke to one of the income protection advisers, Joe.
Setting the deferred period
Tim was initially looking for a policy with a deferred period of two months so the policy started paying out once his sick pay ends, but having found out that Tim had around one month of savings Joe recommended a three month deferred period which would save Tim around 20% on his monthly premiums.
Joe also found out that Tim suffered from a medical condition. After gaining a little more information, Joe called the underwriters at the leading insurers to see what terms they would offer. It turned out that the insurer that was initially the most competitively priced would need to increase the premiums on the policy by 50% to take account of the extra risk. However, Joe managed to find another insurer that would be happy to offer standard premiums with no exclusions, which is a common situation.
After speaking to Joe, Tim ended up with a policy that had a premium slightly less than what he was initially looking at online by stretching out the deferred period and going with an insurer that was happy to cover his medical condition at no extra cost.
Tim’s Life Insurance
Tim already had some existing life insurance that would payout if either Tim or Emma were to pass away but the level of cover was only enough to pay off the mortgage. As they now have a son, Joe suggested that they take out some additional cover.
Protecting his family
As the mortgage was already covered with their existing policy, Joe recommended a family income benefit policy that would payout enough each month to cover their other monthly bills should one of them pass away. Family income benefit is usually better value for money compared to a term insurance policy that pays out a lump sum and it also avoids the need to think about financial planning should one of them receive a big lump-sum all in one go.
With both life insurance policies in place, the remaining partner would be able to pay off the mortgage and would have enough money to pay their monthly bills until their son was 18 and had left school.
Thus, having spoken to Joe the family was financially secure against the risk of Tim being unable to work due to accident or sickness and the risk of either Tim or Emma passing away before their son had reached adulthood.
If you would like to discuss your specific situation please call us on 0208 432 7333 to see if we can help.