Kritikal Protection Issues - Paano Upang Maging Ang Karapatan Antas ng Personal Protection

Having looked at the quality of cover, we now turn our attention to:

How to get the right level of protection

Using our example again, Dr Cureall has a clear idea now on the quality of protection he wants, and now needs to make a decision regarding the level of cover he requires.

He is a family man in his late thirties, his wife, 3 years younger, is not working, and they have two children, Mat and Laura aged four and two.

We suggested to him that he should follow a simple process to work out how much cover he should buy:

- Find out what income they need to create

- Work out what they already have

- Decide on the time period to be covered

We asked Dr Cureall to fill in a detailed spending plan of what his wife would need if he had died yesterday - and vice versa.

This is to ensure that they would have enough income between now and retirement and into old age, should either of them die prematurely.

The Solution

Mortgage - it is decided to fully cover the interest only •£200,000 mortgage with level term assurance over the 20 years of the loan. Since it is only slightly more in premiums, Dr Cureall decides on two single life policies instead of one joint life plan. This would mean on either death, the surviving partner would still have their cover intact.

Since the strategy we have created for him involves overpaying on the mortgage (he has a flexible mortgage) we could have used decreasing term assurance to mirror the reducing debt. However, Dr Cureall feels he may not reduce the debt all the time, and will reduce the sum assured on the level term assurance when he feels it is appropriate.

Dr Cureall already has sufficient critical illness cover therefore no additional cover was required.

So, on either death, the surviving partner would be free of debt.

What's next?

Living expenses - this is where the spending plan comes in. This, together with a forecastig tool we use, Dr Cureall is able to see how the next 50 years will look on the scenario of either/both deaths.

Clearly their main priority is to provide for the children. This means being able to give them the life they would have had if the grim reaper had not called. So any school and university fees are built in as well as holidays and general living expenses.

Due to the children's ages and university costs being anticipated, the Curealls look at their projections ('financial map') and decide on 22 years as the optimum time period. This also would give Mrs Cureall enough to live on into her old age.

The projection takes into account all NHS benefits, which are considerable now that Dr Cureall has 14 years service, including spouse and child payments. (In addition we recommend that the NHS death in service benefit is placed into trust which will potentially save the family •£60,000 in Inheritance Tax).

Because we have built in these NHS payments, the amount of cover required on Dr Curealls life is nowhere near what he expected. They decide on more lump sum cover, with the balance to be provided by Family Income Benefit (pays out an annual income).

This time instead of level protection, the Curealls decide on indexed cover to protect against inflation. After all we can't plan when we are going to die, and in payment the amounts would increase as well.

We recommend all these policies are written in trust to minimise Inheritance Tax, as well as ensure the monies are paid to the right people quickly on death.

Other points

Their strategy could also include:

- downsizing the home, or selling a business or property

- Mrs Cureall going back to work

You also need to be aware of:

- Mula sa Abril, Pension Kataga Assurance nagbago at inirerekumenda naming repasuhin mo ang iyong proteksyon. Hanggang sa 40% kaluwagan sa buwis ay magagamit sa premium. I-UPDATE: SA 6 Disyembre 2006 ANG GOBYERNO inihayag NA TAX Relief SA premium ay maaaring alisin, WALANG pangwakas na desisyon AY AY GINAWA AT SA ORAS NG pagsusulat.

- Mag-ingat sa Dentista! Kung ikaw o isaalang-alang ang pag-alis o pagbabawas ng iyong NHS sa trabaho, ang iyong NHS cover ay mabawasan.

Sa Buod ng

Kaya kung ano ang nakamit namin?

Well, ang Curealls ngayon ay mayroon ng tamang halaga at kalidad ng pabalat. Ito ay sa loob ng angkop na panahon, at may karapatan ang halo ng antas at ma-index ang proteksyon. Ito ay nakasulat sa tiwala, at ang Curealls masiguro na piliin ang mga karapatan trustee.

The Financial Tips Bottom Line

Siguraduhin mong isaalang-alang ang LAHAT ng iyong mga opsyon bago bumili ng anumang uri ng buhay pagtitiwala, kritikal na sakit o kita ng proteksyon. Just pagbili ng isang patakaran ay maaaring hindi sapat. Seryoso isaalang-alang kung kailangan mong ilagay ito sa ilalim ng pagtitiwala, na kung saan ay maaaring i-save mo mana Tax.

Sa susunod na artikulo kami tumingin sa mga aktwal na karanasan sa pag-angkin ng mga kompanya ng seguro at ang mga dahilan kung bakit ang mga tao sa pagtubos sa mga kritikal na sakit at kita ng proteksyon. Ito ay gumagawa ng mga kagiliw-giliw sa pagbabasa!

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