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LMJ is a firm of independent financial advisers specialising in the management of investment portfolios and pensions. We have been helping clients navigate complex financial markets since 2001 and from those very early days, our business has evolved primarily through client recommendations. Read More

Protection and Insurance

Why should I take out an insurance policy?

 

 

What is Life Insurance?

Life assurance pays out a lump sum or a regular agreed monthly income when the person who is covered by the policy dies. The money provided is intended to pay off any outstanding debts and support your family financially by providing them with a further lump sum or a regular income if you die.

Why life assurance and not insurance? Unfortunately, death is at some point guaranteed - so you are 'assured' that the plan will definitely pay out one day as long as you have paid all the premiums and you die whilst the plan is in force. In return for paying the premiums, the insurance company will pay out the agreed amount - known as the 'sum assured' - if you die during the term of the policy.

Do I need Life Insurance?

If you have any financial responsibility to someone else, it is likely that you will need some form of life insurance. Could your family afford to lose the main earner?

You may also require life assurance as a strategy to reduce the impact of inheritance tax for your family.

In most cases, the minimum amount of life insurance you should have in place needs to be enough to settle any outstanding debts, in particular secured debts such as mortgages and cover funeral costs. The amount cover you require depends entirely on your personal circumstances.

It is generally considered that if you have anyone, especially dependants, who would be financially disadvantaged by your death - i.e. by having to sell your family home due to the inability to keep up mortgage repayments, or would be liable for the cost of bringing up your children, - life insurance should be a high priority for you.

How does Life Insurance work?

Life insurance is similar to other insurances you may have - you pay a premium to the provider who provides you with an agreed level of cover then, if you die whilst the plan is in force, the provider will pay the agreed sum assured to either the named beneficiaries of the plan or your estate.

The cost for the cover will depend on a number of factors including: age, how long you need the cover for (term), any pre existing health conditions, your health at the time the policy is underwritten, whether or not you are a smoker and the level of cover you require.

There are a number of life insurance and protection policies available. They are designed to protect businesses and individuals against events such as serious or critical illnesses, permanent total disablement, serious accidents and the loss of income due to being unable to work.

If you were to die or suffer a critical illness, have you seriously considered how your family would cope financially? Life Assurance is very important to ensure that your families are not in financial despair in the event of any of the above. Term Assurance plans includes the following:

  • Term Life Assurance
  • Whole of Life Insurance
  • Mortgage Protection
  • Family Income Benefit

LMJ Financial Management Ltd can help to protect you and your family financially in a range of circumstances. If you want to find out how we can help you, please speak to us directly by calling 01732 874111. We offer unbiased and professional advice and assess your circumstances to ensure you receive the best possible term assurance, mortgage protection or life insurance quote.

Gaining the right amount of cover

The most important consideration is calculating how much income your family will need at the time of your death.

By providing some basic information on your circumstances, debt and expenses, current life insurance coverage and future income needs we can discuss thoroughly how much cover you will require.

Term Life Assurance
A Term Assurance plan provides a lump sum payment should an individual die within the term of cover.

An individual can take out a plan to cover their own life or that of another. Couples will often look to cover each other's death via a joint life policy.

'Critical Illness Cover' is usually a very prudent and important benefit which can be added to this plan. This part of the policy pays out on diagnosis of a range of conditions. Policyholders will have the peace of mind of knowing that a lump sum is available while going through treatment for a serious condition. This cover will pay out if the critical illness is stated within the provider's definitions and the life assures survives for at least 14 days after diagnosis. 'Terminal Illness' is also an added benefit to Term Assurance plans. The provider will usually pay out if you are diagnosed with a terminal illness prior to the last 18 months of the plan if you have been given a life expectancy of less than 12 months. This benefit relieves the financial strain which can be applied during a very difficult period of time.

Whole of Life Insurance
As for the Term Assurance plan, 'Whole of Life' policies pay out on the death of the policyholder. The premiums are payable for life (rather than a specific term) and were traditionally used to provide poorer families with a method of paying for the funeral costs of a loved one. These policies are now more popularly used to cover Inheritance Tax Liabilities.

Mortgage Protection
Mortgage Protection Insurance allows you to protect your monthly mortgage repayments in the event of losing your income through accident, sickness or unemployment.

The cover can be provided for a period of between 6 and 24 months. In the event of a claim, the policy will provide a tax free payment that will cover the cost of your mortgage payment thus protecting your home as well as providing financial reassurance during a difficult time.

LMJ Financial Management is specialists in this market and our experience and expertise will allow us to tailor an insurance policy to maximize your protection.

Business Protection Insurance

Protect your business

Business Protection Insurance clearly provides an all important safety net for all types of businesses.

Too often, businesses view Business Protection Insurance as an optional extra. Business Protection Insurance should be viewed as part of the business plan from the first day of trading. Businesses all over the UK cease trading for all sorts of reasons, many of which could have been prevented had they had some form of Business Protection Insurance in place.

Key Man / Key Person Insurance
Key Person Protection (formerly Key Man Protection/Insurance) allows your business to protect itself against the financial loss it may suffer from losing a 'key' employee due to death, critical illness or disability.

Key persons are those within a business who are vital to the business's profitability and continued financial success. There may be more than one key person within your business.

Key Person insurance is a complex field of protection and quality advice should be sought from the outset.

Partner and Shareholder Protection
Our Partnership and Shareholder Protection allows a business to help protect itself against the financial loss it may suffer from losing a partner due to death, serious illness or permanent disablement

A partnership in England and Wales does not have its own legal identity, meaning individual partners may be personally responsible for their business's risks.

Losing one partner due to death or serious illness could result in other partners losing both their share in the business assets and part or all of their private assets as well.

Business Loan Protection
The loss of a person who has guaranteed a loan could be a very serious event for a business. It may be an overdraft, a commercial mortgage or a private loan that is affected.

Business Loan Protection provides for a sum of money equal to the outstanding loan to be paid, either to the Company or directly to the lender.

Business Loan Protection will ensure the business loan can be repaid in full upon death or diagnosis of a specified critical illness (where that option is selected) of the life insured.

Group Protection
Group Income Protection insurance assists employers by providing a replacement income for their employees during long-term absence from work through illness or injury.

The Confederation of British Industry has estimated that sickness absence costs UK business £13.4 billion each year. (CBI, 2006)

Long-term illness and injury can be a challenge for employers in many ways:

  • Employees on sick leave have to be paid. Statutory Sick Pay must be paid for 28 weeks but many employers feel obliged to extend this period.
  • Other staff may have to cover for sick colleagues resulting in production problems, overtime payments and an impact to employee morale.
  • New staff must be trained to provide a replacement either temporarily or permanently.
  • The Disability Discrimination Act requires all employers to make adjustments to the work environment to allow a disabled employee to come back to work.

Experts in our field, we are committed to:

  • Providing first class customer service.
  • Offering comprehensive quality products at competitive prices.
  • Providing bespoke solutions that meet the needs of members and deliver on promises.

Income Protection

Could you still pay the bills if you were sick or had an accident? Protect your family and make sure money is there when you need it most with income protection insurance.

What is Income Protection?

  • Protects you against loss of income if you're unable to work because of accident or sickness
  • You will receive a regular payment while you're unable to work
  • Back to work support available via providers
  • Career break option available with certain providers
  • No limit to the number of claims you can make providing you maintain your premiums and the plan remains in force.

Things to consider:

  • If you stop paying the premiums, you may not be covered when you need it most
  • If you cancel the policy, you won't get any refund or get back any premiums
  • Budget cover will only pay out for two years per claim
  • You must be a UK resident, aged 17 to 59
David Simmonds Financial Advisor IFA East Peckham

CONTACT

LMJ Financial Management Ltd

Upper South Hall
Bullen Farm Business Centre
Bullen Lane

East Peckham
Tonbridge
Kent, TN12 5LX

Tel: 01732 874111
Fax: 01732 874222
Email: lmj@lmjfs.co.uk

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LMJ Financial Management Ltd, Upper South Hall, Bullen Farm Business Centre, Bullen Lane, East Peckham, Tonbridge, Kent, TN12 5LX
Tel: 01732 874111 Fax: 01732 874222 Email: lmj@lmjfs.co.uk

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