Suffering a serious or critical illness is something we genuinely hope doesn’t happen to anyone, but what if, for example, you were the one in every two and a half people who are diagnosed with cancer? How would you afford respite care and treatment? What if you wanted the best treatment money could buy – where would you turn to pay for it?

Personal protection can help you to get the right treatment and provide a comfortable convalescence.

What it does – Critical illness cover pays out a tax-free lump sum if you are diagnosed with a major illness, including cancer and heart disease. Actual illnesses covered in a policy may vary between providers.

How it works – Many insurers will make a part payment on an early-stage diagnosis of a condition specified in the policy; the percentage will vary from company to company.

What you need to know – Many people buy a combined life and critical illness policy, and it makes sense to do so. In this case, payment would be made on either diagnosis of a critical illness as defined in the policy, or death, whichever is the sooner. If the cover is combined in this way, the policy premium is usually cheaper than it would be for separate policies, as there is only ever one lump sum paid out by the insurance company.

It may seem a little obvious, but a financial commitment of the magnitude of a standard mortgage is going to impact your monthly affordability; for that reason, we will complete a budget planner and assess your income and affordability.

What most people tend to ignore, however, is the impact that a loss of income could have on your ability to afford a mortgage.

Many people have little or no savings to fall back on and an accident, illness or redundancy would leave you unable to meet your mortgage repayments, thus putting your home at risk of repossession. Even if you could meet your mortgage repayments, you may find it a struggle to afford the monthly expenses.

What it does – This type of policy pays a monthly income tax-free if you are unable to work due to an illness or injury.

How it works – The monthly income under the policy will be between 50 and 70 per cent of your salary and will be paid until you are fit enough to return to work or reach retirement age.

What you need to know – State benefits aren’t generous and only a few employers will continue to support their staff through a long illness, so income protection policies can help families through difficult financial times.

You can choose the date at which the policy would payout in the event of a claim. This can range from a month to up to a year.

Policies that payout sooner will usually have higher premiums.

If purchasing the ‘freehold’ to a property, you carry the responsibility for ensuring that it is insured, and why wouldn’t you? No house = No home = Nowhere to live. Damage to your property could render your property uninhabitable and this could lead to you having to pay a mortgage and rent which can prove costly

What it does – This policy provides cover if you are unable to work because you’re injured, sick or through no fault of your own, you have lost your job.

How it works – In the event of a claim, you will receive a predetermined percentage of your monthly income, usually for a period of up to 12 months. Payments are made after a waiting period of at least a month. If you choose a longer waiting period, your premiums are likely to be lower.

What you need to know – Accident, sickness and unemployment cover differs from mortgage payment protection which is designed specifically to cover your repayments on a specific debt such as your mortgage. It differs from income protection insurance in that it includes unemployment cover.

Nobody wakes up in the morning and thinks “I know, I’ll get a mortgage.” Instead, most of us are drawn in by the promise of a beautiful home for ourselves and our families. What then, would you do if a catastrophic event were to befall your family such as the loss of either of the borrowers?

Would the surviving borrower be able to maintain the repayments on their own, as well as take on the additional responsibilities that suddenly come their way?

Having the mortgage repaid in one payment certainly would appeal to most joint borrowers or those with families.

Of equal significance is the impact that a critical illness could have on your ability to pay for a mortgage. If you or your partner were to suffer from a heart attack, cancer or a stroke how would you balance paying your mortgage, other financial responsibilities, family responsibilities, work, and treatment?

It’s likely something would have to give.

What it does – Mortgage payment protection policies are designed to cover the cost of your mortgage payments if you’re sick, have an accident or become unemployed and can’t work.

How it works – Generally, the policy will start paying out either 31 or 60 days after you are unable to work. Most policies will payout for a maximum of one year.

What you need to know – With statutory sick pay set at just £96.35 and only payable for up to 28 weeks, many families would struggle to meet their mortgage payments if a disaster were to strike.

The amount payable under the policy is usually around £1,500 to £2,000 maximum per month. So, if you have a large mortgage, you will need to consider how you would cover any shortfall.

You can choose the date at which the policy would payout in the event of a claim. This can range from a month to up to a year. Policies that payout sooner will have higher premiums.

So, you have a nice new home, what next? Many will choose to add a personal touch by filling their property with shiny new things. But what if someone else were to take a liking to these? Could you afford to replace all the goods in your home?

Do you have sufficient money set aside to replace your lounge carpet if a tin of paint is spilt during the decorating process? Is your tablet, phone and wallet covered when you are away from home? We work hard to pay for our possessions, so why not cover them against several potential risks?

We all love our homes, particularly a new home, but most would say that their family is more important.
Who would take care of your family if you were incapacitated, or worse still if you were no longer around to take care of your loved ones?

Who would pay the bills? Who would cover your share of the household chores? How would your loved ones fulfil all of those plans you have made without the means to do so?

What it does – Family income benefit policies work in a similar way to ordinary life cover, but instead of a lump sum, the policy pays out a regular income if you die.

How it works – A typical policy might be taken out by the parents of young children, so that if one parent were to die during the term of the policy, then an income would be paid out for a predetermined period. So, if you had a 20-year policy and were to die five years into it, then the policy would pay out a regular income for the remaining 15 years.

What you need to know – Family income benefit insurance is a simple way to provide your family with an ongoing income rather than a lump sum if you were to die. Critical illness can also be added that would provide a payout if one of the parents were to be diagnosed with a serious illness.

What it does – Private medical insurance means that you can get access to diagnosis and treatment faster and therefore are more likely to recover quicker. Policies cover the costs of private medical care including seeing consultants and specialists, treatment, surgery, private hospital accommodation and nursing costs.

How it works – You will need to decide what level of cover you want for yourself and your family, as this will determine what your premiums will cost. You can choose the level of excess, that’s the amount of any claim you are happy to pay yourself. Paying a higher excess will generally bring the cost of premiums down.

What you need to know – There are conditions that insurers won’t pay out for, including cosmetic surgery and alcohol or drug-related illnesses. You may find illnesses that you’ve suffered from in the past are excluded from cover as they are deemed to be ‘pre-existing conditions.

Most insurance companies will offer this option at no extra cost when you take out a policy. Your adviser will explain the process and help you fill out the necessary documentation to set up this simple but effective arrangement. 

There is a certain amount of jargon used to refer to trusts, but don’t worry, as your adviser will be able to explain the technicalities in a down-to-earth way, so the details are clear. 

Please note: Wills, IHT and Trusts are not regulated by the Financial Conduct Authority. 

1. Not all protection policies can be written in trust. 

2. If the policy includes Critical Illness, writing the policy can be more complex. Your adviser will be able to help with this.

Writing a policy in trust 

When it comes to planning for the future, your adviser will be able to explain how taking the simple step of putting your policy into a trust could, in certain circumstances, make good sense for you and your family. 

If you thought you had to be incredibly rich to need to set up a trust, you’ll be pleased to know that this simple formality is now widely used to help pass money on swiftly and efficiently to loved ones on death. 

A trust is a legal arrangement that helps ensure that the payout from your life policy goes to whoever you choose to receive it, meaning you can control where your money goes.

How trusts work in practice 

Under normal circumstances, the proceeds from a life policy form part of your estate on your death and could therefore be subject to Inheritance Tax if the amount you leave, referred to as your estate, exceeds the threshold at which Inheritance Tax becomes payable. 

By doing what’s called ‘writing the policy in trust’, the payout from the policy can be made directly to your beneficiaries, for instance, your wife or your children, and doesn’t form part of your estate and therefore isn’t subject to Inheritance Tax. 

In addition, the payment wouldn’t have to wait until the grant of probate, the legal document required to administer your estate, has been granted. Obtaining probate can be a lengthy and time-consuming process.

However, if a policy is written in trust, there is no need to wait for probate as the proceeds can be paid out once a death certificate has been obtained. 

Home insurance is vital to protect the roof over your head and all your possessions. It’s simple to arrange and acts as a shock absorber, protecting thousands of families each year from the financial effects of life’s unwelcome events like burglary, loss, fire, and flood. 

Choosing from the hundreds of policies on offer can be bewildering and time-consuming. That’s where using an adviser can be of real help in finding you the most suitable deal for your needs. 

Contents insurance policies are designed to cover your possessions from loss, damage, or theft. 

Insurers define ‘contents’ as all those things that you’d take with you if you moved house. So, most policies include things like furniture, carpets, curtains, electrical goods, clothes, and valuables such as watches and jewellery. 

The cover available falls into two types: ‘new for old’ policies which mean that, if for instance, something is stolen then the payout will be enough to buy an equivalent new item. Indemnity policies, which are often cheaper, pay out a reduced amount if you make a claim as they consider the wear and tear or the depreciation in the value of an item. 

So, if you lost something you’d owned for a while, you would get back the current value, not what it would cost to buy new. 

The amount of cover you’ll need, referred to as the ‘sum assured’, needs to be adequate for your needs so that you don’t risk being underinsured. Being underinsured would mean that your insurer might restrict the amount they would payout in the event of a claim. 

Simply walking around your home with a notebook and pen can help you compile a comprehensive list of what you own. Don’t forget to include those things you store away in cupboards, basements, and attics too. 

• Valuable items away from home

You can get cover for belongings you have with you when you’re away from home. When taking out a policy, you’ll be asked if you require insurance for various items such as mobile phones, laptops, jewellery, and cameras. There is usually a limit on the value of any one item, and you may need to specify the items you want to insure. 

• Cover for additional risks

For further peace of mind, many people opt to pay for additional cover under their policy. You can, for instance, add insurance for legal expenses, home emergencies, drains and plumbing, freezer breakdown, accidental damage to home contents and accidental damage for personal possessions away