Personal Insurance
Find Out More About the Financial Services We Offer
We all hope it won’t happen but there are a few potential situations you could find yourself in: You or a family member could die. You or a family member could become very ill. You or a family member may not be able to work for an extended period. Any one of these situations could have a very dramatic impact on your financial position and lifestyle and many of our clients have been affected like this.
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Our Solutions
Term Life Cover
This is an insurance that pays out a lump sum or monthly payments normally to those that depend on you. When we consider life assurance we look closely at the cover, and you may or may not have this in place. Most clients will have some form of life assurance paid to their estate in the form of a pension. When the John Davies Financial Consultancy team look at your own circumstances, we encourage our clients to consider firstly their current expenditure and how much of that expenditure is met by their income.
For example, Mr and Mrs Smith’s expenditure is £2,000 per month and Mr Smith’s income covers £1,000 of that. So, we may recommend that Mr Smith be insured to cover this £1,000 per month so that Mrs Smith can maintain her current standard of living should Mr Smith pass away.
We would always recommend that any debts or liabilities were covered, and this would include mortgages and loans. Many clients already have insurance to cover debts and we recommend this is regularly reviewed to make sure the life cover matches the debt.
We also recommend that clients with children have life assurance to replace their partner’s income or their role in the household. Often only the working individual is insured for families where one partner works, we recommend that both parties are insured. The reason for this is that we question whether the remaining partner would be able to continue working in the same capacity. Would the partner have to reduce their working hours, would they have to pay someone else to undertake the childcare?
We normally place life cover in Trust as this helps speed up the time taken to receive the money from the insurer, as you would not have to provide a Will or wait for Probate to be granted. This facility is unlikely to be available from an online company.
You may be required to undertake a medical and/or a medical report may be required from you GP. As a result of this and any other medical conditions a policy can be acquired at standard rates, or the premiums can be increased which could make them expensive or unaffordable. In the worst case you could be declined insurance. If you became ill or lose your job, you may not be able to maintain your premiums.
Any pay-out can be in the form of a lump sum or monthly/annual payments.
For example, Mr and Mrs Smith’s expenditure is £2,000 per month and Mr Smith’s income covers £1,000 of that. So, we may recommend that Mr Smith be insured to cover this £1,000 per month so that Mrs Smith can maintain her current standard of living should Mr Smith pass away.
We would always recommend that any debts or liabilities were covered, and this would include mortgages and loans. Many clients already have insurance to cover debts and we recommend this is regularly reviewed to make sure the life cover matches the debt.
We also recommend that clients with children have life assurance to replace their partner’s income or their role in the household. Often only the working individual is insured for families where one partner works, we recommend that both parties are insured. The reason for this is that we question whether the remaining partner would be able to continue working in the same capacity. Would the partner have to reduce their working hours, would they have to pay someone else to undertake the childcare?
We normally place life cover in Trust as this helps speed up the time taken to receive the money from the insurer, as you would not have to provide a Will or wait for Probate to be granted. This facility is unlikely to be available from an online company.
You may be required to undertake a medical and/or a medical report may be required from you GP. As a result of this and any other medical conditions a policy can be acquired at standard rates, or the premiums can be increased which could make them expensive or unaffordable. In the worst case you could be declined insurance. If you became ill or lose your job, you may not be able to maintain your premiums.
Any pay-out can be in the form of a lump sum or monthly/annual payments.
Whole Life Policies
A Whole of Life policy works much the same way as an ordinary term life policy. The only difference is that a Whole of Life policy does not have an end date - it will last the whole of your life and will pay out at some time.
For example, Mr Smith has a Whole of Life policy with a £50,000 sum assured for £100 per month premium with no end date.
These policies are more expensive than a conventional life assurance. What you need to consider, is that if you live for a long time, what you have paid in contributions may be the same or more than the sum assured. In Mr Smith’s case, £100 per month is £1,200 per year therefore, in 42 years he will have paid in more than the sum assured.
Often these policies are taken out to pay an inheritance tax bill but care must be taken when reviewing older Whole of Life policies as these may have an encashment value.
For example, Mr Smith has a Whole of Life policy with a £50,000 sum assured for £100 per month premium with no end date.
These policies are more expensive than a conventional life assurance. What you need to consider, is that if you live for a long time, what you have paid in contributions may be the same or more than the sum assured. In Mr Smith’s case, £100 per month is £1,200 per year therefore, in 42 years he will have paid in more than the sum assured.
Often these policies are taken out to pay an inheritance tax bill but care must be taken when reviewing older Whole of Life policies as these may have an encashment value.
Critical Illness
Historically clients did not consider critical illness cover only life cover, but, with more treatable illnesses and medical advances, something you may have died from 10 years ago, you may now survive or even make a full recovery. A critical illness policy is much like an ordinary life policy but pays out a lump sum on the diagnosis of a specified illness or condition. We encourage our clients to consider how they would cope financially if diagnosed with an illness that would stop them from working. How would the mortgage or household bills be paid?
The conditions covered vary from company to company, and we can check with the product provider to see exactly which conditions are covered, but they normally include:
The reason for this is that if claims are paid for small early-stage cancers/illnesses which could be treated with a day patient operation, then the premiums would be too high for anyone to afford. It is much more important to financially support the more serious cases, where early treatment might fail, or which are discovered too late and this is precisely what your premium is for. These policies do not cover death, but it is possible to cover both death and critical illness within the same policy.
Care must be taken when reviewing older critical illness policies. The new policies tend to cover more illnesses but have more stringent definitions of those illnesses. Definitions on the older policies tend to be less rigid. Critical illness policies tend to be more expensive than life cover as there is a higher chance of a claim which may make premiums unaffordable.
Certain illnesses are excluded always check you policy for which illness are covered and pre-existing illness may not be covered.
You may be required to undertake a medical and/or a medical report may be required from you GP. As a result of this and any other medical conditions a policy can be acquired at standard rates, or the premiums can be increased which could make them expensive or unaffordable. in the worst case you could be decline insurance. If you became ill or lose your job, you may not be able to maintain your premiums.
This isn’t a savings product; you will not receive money if you do not make a claim.
The conditions covered vary from company to company, and we can check with the product provider to see exactly which conditions are covered, but they normally include:
- Some forms of cancer
- Some forms of heart attack/disease
- Stroke
- Some terminal conditions
The reason for this is that if claims are paid for small early-stage cancers/illnesses which could be treated with a day patient operation, then the premiums would be too high for anyone to afford. It is much more important to financially support the more serious cases, where early treatment might fail, or which are discovered too late and this is precisely what your premium is for. These policies do not cover death, but it is possible to cover both death and critical illness within the same policy.
Care must be taken when reviewing older critical illness policies. The new policies tend to cover more illnesses but have more stringent definitions of those illnesses. Definitions on the older policies tend to be less rigid. Critical illness policies tend to be more expensive than life cover as there is a higher chance of a claim which may make premiums unaffordable.
Certain illnesses are excluded always check you policy for which illness are covered and pre-existing illness may not be covered.
You may be required to undertake a medical and/or a medical report may be required from you GP. As a result of this and any other medical conditions a policy can be acquired at standard rates, or the premiums can be increased which could make them expensive or unaffordable. in the worst case you could be decline insurance. If you became ill or lose your job, you may not be able to maintain your premiums.
This isn’t a savings product; you will not receive money if you do not make a claim.
Income Protection
Income protection in some way is very similar to critical illness cover but it is designed to pay out monthly payments to replace lost income through you not being able to work because of an illness or disability. There is some good news however! Some employers will pay you in the short-term if you are absent due to illness.
There are also some state benefits available like Statutory Sick Pay. The downside is these often fall way short of what clients need.
We work with our clients to look at their own situation and advise accordingly. For example:
Mr Smith earns £1,000 per month before tax. He will receive full pay for the first 3 months from his employer. He has £3,000 in savings (so for the first six months he will be able to live). After this period, he will have to rely on State Benefits.
If Mr Smith had an income protection policy, this would bridge this gap. Generally, income protection would pay out approximately 65% of an individual’s gross income i.e., £650.
More than one claim can be made on these policies (even if you are claiming for the same illness). So, if you were ill and then you recovered and went back to work and you were subsequently ill again, further claims can be made.
The costs of these policies tend to be more expensive than life or critical illness policies. As with all insurance policies the insurer will take into consideration:
There are also some state benefits available like Statutory Sick Pay. The downside is these often fall way short of what clients need.
We work with our clients to look at their own situation and advise accordingly. For example:
Mr Smith earns £1,000 per month before tax. He will receive full pay for the first 3 months from his employer. He has £3,000 in savings (so for the first six months he will be able to live). After this period, he will have to rely on State Benefits.
If Mr Smith had an income protection policy, this would bridge this gap. Generally, income protection would pay out approximately 65% of an individual’s gross income i.e., £650.
More than one claim can be made on these policies (even if you are claiming for the same illness). So, if you were ill and then you recovered and went back to work and you were subsequently ill again, further claims can be made.
The costs of these policies tend to be more expensive than life or critical illness policies. As with all insurance policies the insurer will take into consideration:
- Age
- Current and family health
- Whether you are a smoker/non-smoker
- The amount and length of cover
- Single or joint applications
- Occupation
- Hobbies and pursuits
- Accepted without question
- Request a GP (Doctors) report
- Request a medical or both
- The premium is rated i.e. the premium increases because you have a high risk of illness
- Postponed due to the outcome of investigations
- Cover is declined
Private Medical Insurance
With NHS cuts and increasing waiting times, clients are more than ever looking at Private Medical Insurance (PMI).
A Private Medical Insurance (PMI) plan works by paying a monthly premium to the insurance provider for the cover.
If you require any form of treatment, tests, operations, aftercare or a visit to a specialist consultant, then the insurance company will pay for this to be completed privately. This can be much quicker than the NHS but it does not cover GP services, the management of long term illnesses or accident and emergency services.
A Private Medical Insurance (PMI) plan works by paying a monthly premium to the insurance provider for the cover.
If you require any form of treatment, tests, operations, aftercare or a visit to a specialist consultant, then the insurance company will pay for this to be completed privately. This can be much quicker than the NHS but it does not cover GP services, the management of long term illnesses or accident and emergency services.
Accident, Sickness & Unemployment Cover
These types of policies are similar to income protection in that they will pay out a regular monthly sum to you if you are ill or as a result of an accident, you could not work. They would also pay out a regular monthly amount if you lose your job or are made redundant through no fault of your own (voluntary redundancy would also be excluded).
The difference between this and Income Protection is that these are 12-month renewable contracts so the cost is likely to increase each year and they only pay out for a limited time i.e. 12 or 24 months.
The difference between this and Income Protection is that these are 12-month renewable contracts so the cost is likely to increase each year and they only pay out for a limited time i.e. 12 or 24 months.
