What is Personal Insurance?
This is the place to find out everything you ever wanted to know about personal health and protection insurance.
Personal insurance covers a range of health and protection insurance products that provide a safety net against life’s uncertainties for you and your family. The types of insurance to consider are:
Income Protection Insurance pays out monthly benefit to you if you cannot work due to illness or injury. Depending on the insurers you can cover up to 70% of your gross income up to the age you expect to retire.
Life Insurance pays out a tax free lump-sum to your loved ones should you pass away during the term of your policy. You can opt for level or decreasing cover while covering yourself and your partner.
Critical Illness Cover
Critical Illness Insurance pays out a tax free lump-sum should you suffer one of over 40 serious illnesses, the most common illnesses which are covered include cancer, heart attack and stroke.
Private Medical Insurance
Private Health Insurance covers the cost of medical treatment in private healthcare facilities ensuring you receive the best possible care and attention and are able to make the quickest recovery.
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Why take out Personal Insurance?
The first question to ask is what do you need to protect?
These are typical reasons:
You have dependents such as a partner and children that you want to shield from financial hardship and worry should you die
You need a replacement income if you become ill or injured and cannot work so you can keep up with all your essential outgoings
You want the reassurance of both quality and timely healthcare should something happen to you or your family
When should I review my Personal Insurance?
As life changes so will your protection needs so it makes sense to review your personal insurance policies on a regular basis. Life changes may include:
- Getting married/co-habiting
- Starting a family
- Moving to a jobs with a change in employee benefits
- Becoming self-employed, a contractor or starting a business
- Buying a property / getting a mortgage
- Moving to a higher value property with a larger mortgage
Why use Drewberry™?
We specialise in personal insurance and provide independent and expert advice. We have access to the whole UK insurance market to find you the right cover. We are here for our clients to provide ongoing guidance on your protection needs and to supply any support should you need to make a claim.
We aim to provide our clients with a 5-star service – 95% of our clients rate our service as 5-star based on 519 reviews (June, 2016). Read all our reviews on Reviews.co.uk here.
Do I need Personal Insurance?
What if I can’t work?
Income protection provides you with a replacement income if you cannot work because of illness or injury. Some policies also allow you to add cover for forced redundancy.
With 1 in 10 being off work due to illness or injury for over 6 months during their working lives (Guardian / Unum, 2011), income protection is often viewed as the most important type of personal insurance.
State benefits are low and many could not maintain their standard of living if forced to rely on them. Do you have a sufficiently high level of savings to fall back on should you be unable to work for months, years or even decades? If not, then income protection could be the answer.
Equally, if your family relies on your income to pay some or all of the essential outgoings such as a mortgage and bills, then income protection can often be viewed as essential insurance. Policies can pay out up to retirement age and typically cover around 50-65% of your former salary.
What if I die?
Life Insurance provides cover for an agreed lump sum for a set period – often this will be for the length of your mortgage, so perhaps 25 years. If you die during the term then your beneficiaries will receive the payout (tax free if written in trust).
Another popular type of life insurance is called Family Income Benefit, which also runs for a fixed term but pays out an agreed sum annually. The policy often runs until your youngest child is 21 or 23 years old and so should have finished education.
If you have dependents such as children and a partner who relies on your income, then life insurance is important to provide for them if you die.
It is especially important to consider life insurance if you have a mortgage and either you or your partner wouldn’t be able to afford the monthly repayments alone. Mortgage life insurance can help to clear that debt should the worst happen.
What if I become critically ill?
Critical illness insurance pays an agreed tax-free lump sum if you suffer a serious illness or injury, which is specified in the policy and cover runs for an agreed term. Some critical illness policies also offer ‘partial payments’ when you contract a less serious condition, leaving the remainder of cover in place.
The money can be used as you wish, but could be used to pay off a mortgage, for example. Critical illness cover can also be purchased combined with life cover – which often makes sense as life insurance with critical illness cover is about the same price as just standalone critical illness cover.
This cover is equally suitable for those with a family to protect or those that are single since if you are unwell, a lump sum will help you meet your financial commitments (although income protection may be a more suitable option).
For example, critical illness cover is often included on mortgage life insurance so the loan can be repaid should you suffer a serious illness. The policy can be taken out in either single or joint names with your partner.
What about fast healthcare treatment?
Personal medical insurance means you have access to private healthcare facilities and can avoid NHS waiting lists and can often benefit from fast-track consultations.
Private health insurance is designed for acute conditions that are curable and it generally does not cover chronic conditions. You can be treated in private facilities in an NHS hospital or in a private hospital.
This cover can be valuable for those who want access to quality healthcare promptly, for example, if you are running a business. It can also be welcome to have the reassurance of having private cover for your family since it means more convenience and choice in terms of where and when you are treated.
But, the NHS remains free to use and provides relatively good care for many serious conditions. So, if you have budget restrictions, then income protection and life insurance should usually be viewed as a higher priority.
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To help individuals and businesses throughout the UK to plan their financial future whilst protecting them against the financial risks they may face.
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Added options for those with a Limited Company
It is very common for those moving from an employed role to contracting through their own limited company to need to replace employee benefits they previously had with personal insurances. In this case, there are specific plans that can be owned and paid for by your limited company:
Relevant Life Insurance
Much like personal life insurance, relevant life cover pays out a lump-sum to your family should you pass away. The payout will be tax free when the policy is written into a relevant life trust (which we can do for you at no extra cost).
HMRC declared that the premiums paid for relevant life cover are an allowable business expense provided the purpose of the plan is for family protection, meaning that they are considerably more tax efficient relative to personal cover.
Executive Income Protection
Just the same as personal income protection, executive income insurance pays out a monthly benefit if you are unable to undertake your work due to accident or sickness.
The key difference is that the policy would be owned and paid for by your limited company and if a claim is made then the insurer will pay the benefit out to the business, which can then be distributed to you from there. As the benefit is paid before tax you can cover up to 80% of your income.
Although not an insurance policy, if you do start contracting through your own limited company then you will need to make your own pension provisions.
There are huge tax advantages to contributing to a pension because the monthly contributions can be made by your limited company and attract corporation tax relief. Drewberry also has a financial advisory arm providing pension advice so if you would like help in this area please get in touch.
Personal Insurance Claims
At Drewberry we only recommend insurers that have a strong reputation for paying claims and looking after their policyholders. Using this tool allows you to see insurers’ claims statistics for Income Protection Insurance, Life Insurance and Critical Illness Cover.
If you have any questions about the claims process we are always on hand to help.
Insurer Claims Statistics
When choosing our personal protection we want to know it is going to pay out when we need it to.
By choosing a product or specific insurer from the menu below you will be able to view the claims payout rates for all of the main UK insurers for income protection, life insurance and critical illness insurance.
Whether you're currently saving for retirement, about to retire or already in retirement, our expert pension advisers can help you maximise your retirement assets.
Whether you're financial goals, we'll find the ideal combination of investments for your needs whilst maintaining an appropriate level of risk for you.
Whatever your circumstances, our advisers are able to advise on how best to optimise your tax position to help reduce the impact of taxation on your hard-earned savings.
Enjoy the peace of mind that comes from knowing you've protected what's most important in life. Our specialist insurance advisers are on hand to help