Insurance for you and your family
As our personal and family circumstances change over time our financial priorities also change. We need to make sure that in the event of unforeseen illness or other adverse circumstances, we are protected and are able to take care of any outstanding financial commitments and provide for ourselves and our family going forward, often in what can be difficult or challenging times. Here are some of the key aspects of insurance to consider for you and your family.
Warwick: Wealth Management Advice Services
Charlotte engaged the services of ASPL for wealth management advice after she had inherited a sizeable fortune. She was considering emigrating, and purchasing a number of properties where her children lived, in Asia, Australia and London.
She wanted to invest on a long-term basis, but also required a flexible, sizeable capital withdrawal facility to enable property purchases to be made, as and when she wanted.
Charlotte did not want to take much risk with the portfolio, and wanted income/capital withdrawals to be paid into her Guernsey bank account(s).
We have managed her capital and income without giving rise to any taxation liabilities, to date, and provided her with a suitably flexible and diverse portfolio, that meets her needs.
NB. Whilst the Client names have been changed for Client privacy purposes, these case studies are actual ASPL Client case studies.
For a single person,without dependants, typically the only reason to insure one’s life is to meet the requirements of a mortgage lender.
Once we have a partner and/or a family, the need for life assurance becomes considerably greater. This is because not only do we wish to protect our family from becoming responsible for repaying the mortgage and any other debts, but perhaps more importantly, to make financial provision for dependants.
Where a spouse has, for example, given up work to raise a child/children, the death of the “breadwinning” partner can be financially disastrous as well as emotionally disastrous. Therefore the way to ensure continuation of the family’s lifestyle in the event of the breadwinner’s death is to provide a Cash sum which can be invested to provide ongoing income, e.g. until the children are grown up, or at the very least a breathing space whilst the surviving partner assesses his or her options, e.g. returning to work.
There are many types of life assurance, and please contact us for advice on any of the following:
- Level Term Assurance
- Increasing Term Assurance
- Decreasing Term Assurance/Mortgage Protection
- Convertible Term Assurance
- Family Income Benefit Policies
- Whole of Life Assurance
These insurance policies pay out a lump sum upon diagnosis of certain specified illnesses (e.g. cancer, heart attack, stroke or permanent total disablement). Such policies are suitable for single people (as they receive the benefit in the event of a successful claim), families and businesses. The proceeds can normally be received tax-free. Unlike “Income Protection” (or PHI), critical illness policies pay out a lump sum on diagnosis, whereas Income Protection/PHI pays a replacement income whilst you are unable to work due to ill-health. They are therefore quite complimentary.
As the likelihood of you suffering a critical illness is greater than you dying, this cover is understandably more expensive than straightforward life assurance.
Like life assurance, critical illness policies can be arranged over a certain short period (e.g. 5 years) or for many years.
This type of insurance pays out regular sums of money to you upon becoming disabled through sickness or accident and therefore being unable to continue working. Such policies are therefore relevant to individuals with or without families. They are particularly useful to the self-employed.
If a policy is effected personally, no income tax arises on any payment under the policy.
The idea here is simply to protect your loss of income for many years. Arguably, the younger you are, the more benefit you could draw from such policies as there is a longer period of insurance (i.e. up until the day you retire, return to work after ill-health, or die).
Why should you consider putting some or all of your life insurance policies under a Trust? The main benefits are to avoid Inheritance Tax upon the proceeds, to ensure that the death benefit gets paid to exactly who you want to receive it, and lastly that the life assurance monies are paid out exactly when it is needed.
A Trust is simply a way of giving some property (such as your life assurance proceeds) to other people without giving them full control over it. The main parties are the “Settlor”, (the person who sets up the Trust), the “Trustees” (the legal owners of the Trust property who are legally bound to look after the property in line with the Trust requirements) and lastly the “beneficiaries (the people who will receive any benefits from the Trust).
The Financial Conduct Authority does not regulate Trusts.