Vita - Life Insurance, Critical Illness and Income Protection

The concept of Life Insurance is simple - if you pass away during the term of the policy then a sum of money is paid out. The exact reason for needing the cover may mean that a particular type of Life Insurance is better suited to your circumstances. We will advise the best type of cover for you - but here's an overview:

Level Cover
Provides a lump-sum pay out, where the amount of cover stays the same throughout the policy. You can also include an option to have the amount of cover increase each year to keep pace with inflation (this is known as either 'Indexation' or 'Increasing Cover').

Family Income Benefit
The cover is paid out as a series of monthly or annual installments, rather than a lump sum. It can accurately replace the income lost as a result of death of a wage earner and the next of kin don't have to worry about how to invest a large lump sum of cash. This type of policy is typically cheaper than Level Cover. Your Adviser will explain the pros and cons of each type of cover.

Whole of Life Cover
This policy does not have an end date. Provided you keep paying the premiums the cover will pay out a fixed amount of cover upon death, whenever that may be. The main benefits of this type of cover are to ensure funeral costs are covered, leave a financial 'nest-egg' for loved ones or to provision for an Inheritance Tax (IHT) bill. Learn more about Funeral and Inheritance Tax Planning.

Decreasing Cover
This type isn't particularly relevant to providing cover for your family. If you are looking to protect a mortgage which is on a repayment basis, then we would recommend this type of policy. The amount of cover reduces each year, typically in line with the outstanding balance of the mortgage. Learn more about Life Insurance for your Mortgage.

You can purchase Life Insurance virtually anywhere now, however, the cost for identical cover can vary dramatically. A pint of milk doesn't cost the same in every shop and insurance isn't any different either!

When your bank or mortgage adviser has sorted out your mortgage, it's likely that they'll use the 'would you like fries with that' approach to tag on some insurance. Whilst it may seem logical and convenient to use the same person who's helping you raise finance, you are unknowingly restricting your options and could end up paying around 50% more than you need to - which can total thousands of pounds over the term of a policy.

Read this article in The Telegraph which explains more.

Here at Vita we can source discounted premiums from all insurers in the UK and are experts in this field.

Each insurer gives you the option to write your Life Insurance policy 'in Trust'. This is a method which allows you, and nominated others, to control what happens to the policy proceeds after your death.

• There is no cost for setting up a Trust - we will draft the form and assist you to complete it.
  
• Ensures that the policy proceeds are paid directly to the people that you nominate.
  
• Avoid a potential Inheritance Tax bill - Policy proceeds are not typically liable to be taxed.
  
• Policy proceeds are paid at the earliest opportunity and not held up in Probate. (i.e. the proceeds do not form part of your Estate. They are kept separate).

Considering whether to include Critical Illness Cover is one of the most important financial decisions you will ever make for yourself and your family. Please take 5 minutes to read our dedicated page.

Critical illness Cover aims to give you peace of mind, ensuring you can receive a tax-free lump sum if you are diagnosed with one of the listed critical illness conditions under the policy.

Worryingly, a serious illness, such as cancer, stroke or heart attack, affects one-in-four women and one-in-five men before they reach retirement age. The latest statistics from Cancer Research UK show that 1 in 2 people in the UK born after 1960 will be diagnosed with some form of cancer during their lifetime.

If you, or those who depend on you, would face financial difficulties if you became critically ill you should seriously consider taking out Critical Illness Cover. When you're critically ill, the last thing you need is any financial worry like the fear of losing your home because you can't pay your mortgage or provide for you or your family.

View our dedicated Critical Illness Cover page to learn more.