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Life Assurance & Critical Illness

Although some of the features covered in this section have been touched upon elsewhere, we hope that this information will help you to assess how all of the various income protection, life assurance and critical illness covers can compliment each other to give you total protection.

What is Life Assurance?

A lump sum or regular income payable in the event of death within a specified term. Benefits are normally tax free and can be used for:

  • Family Protection to maintain the family's standard of living and aspirations
  • Mortgage Protection to clear or reduce outstanding mortgage debt
  • Inheritance Tax Planning to provide funds via a trust to help mitigate inheritance tax liability upon death

Life assurance policies tend to fall into two categories:

  • Protection Policies designed to provide cash tax free in the event of death only
  • Investment Policies to provide cash in the future not just in the event of death, but as a result of structured savings

Significant reductions in the cost of such cover over recent years means you could probably increase your cover now for the same premium. We therefore recommend that you review your existing cover on a regular basis.

 

What is Critical Illness Insurance?

A critical illness plan pays a tax free lump sum if you are diagnosed with a specified medical condition, or become totally and permanently disabled during the term of a policy.

The plans normally recommended by MMM, where possible, would also pay benefits in the event of total and permanent disability that results in you being totally and permanently unable to work in your specific occupation, even down to your professional speciality.

Most of us accept that we ought to consider the implications of a critical illness or disability, particularly if we have dependents or run our own businesses.  We go on until the unthinkable accident or illness happens and we suddenly realise we're unable to pay for:

  • A holiday or extended period off work in which to recuperate
  • Alterations to our home
  • Modifications to the car
  • Someone to look after the family
  • Pension provision to give us a comfortable retirement
  • Existing financial commitments, e.g. mortgage, school fees.

Every year more than 600,000 people in the UK suffer a critical illness. The majority survive.

  • Heart attacks - more than 150,000 people suffer their first heart attack. Over half survive at least a year. (Source: British Heart Foundation)
  • Stroke - some 120,000 people suffer strokes. About 70% survive at least a year. (Source: Chest, Heart, Stroke Foundation.)
  • Cancer - about 250,000 people are diagnosed with cancer. About 40% survive at least five years. (Source: Cancer Research Campaign.)
  • Multiple Sclerosis - there are now about 85,000 sufferers of MS in the UK. (Source: Multiple Sclerosis Society.)
  • Kidney Failure - some 100,000 people presently suffer from kidney disease. About 500 new cases are diagnosed each year. (Source: Munich Reassurance)

    Modern medicine can save life but it cannot protect you from the financial implications of critical illness. These can be devastating - both for your family and your business.

    Critical illness insurance alone will not repair the damage to your health but it can cushion you against the potentially disastrous impact of serious illness on your personal finances. And by relieving you from financial pressures, it can help you make a fuller physical recovery.