Case Studies: How Life Insurance Can Serve You.
Your needs can change over the years and protection policies, for the most part, can be altered to fit these needs. A short term policy can protect against extra costs. A key person policy can protect your business against the loss of a vital employee. A protection policy can provide cover against certain situations. We have listed some examples below.
Emma is the primary earner for her family. The only debt they have is a mortgage. She takes out Decreasing Term cover and Life and Critical Illness Protection Cover to protect their financial security. In this case, the decreasing term cover protects the mortgage payments and the life and critical illness cover protects against her loss of earnings. She has consequently protected the family home while also providing a further sum due to the loss of her wage.
Loss to Business
Scott is an important key worker for his company. In the event of his death, the company would be required to outsource Scott’s work to third parties. Furthermore, they would also need to look for someone qualified enough to replace him at the same time. Subsequently, Key Person Business Protection would ensure that the costs for this are covered.
Charles and James run and own a business together. Sadly, Charles passes away without protection. Probate law grants his wife 50% of the company that he owned with James. Charles’ widow now owns 50% of a company that she knows nothing about. At the same time, James does not have the funds to purchase the 50% from her.
With a Relevant Life Plan in place, the business could insure against the death of a partner with the sum assured in trust for the partner’s family. An agreement can be drawn up so that in the event of Charles’ death, his 50% of the company would revert to James with the sum assured going to Charles’ widow.
As a result, business can continue and, most importantly, Charles’ family will be secure.
Eric passes away with a loan outstanding. Consequently, Eric’s family will now be required to pay his debts while missing the income that he brought in. Eric takes out a Decreasing Term Policy. The loan provider can be directly assigned the sum assured. Also, the sum assured and premiums will decrease as the loan is paid off. In the event of Eric’s death, the lender receives the sum assured and the loan is cleared.
Short Term Protection
Jean’s daughter is due to start university. To ensure that her daughter will be able to continue her studies in the event of her death, Jean takes out Level Term Assurance. The policy lasts for the duration of the degree course with the sum assured in trust. Jean has therefore guaranteed to pay for her daughter’s continuing education and living fees.
Debt or Funeral Protection
Anna Marie has very little savings and a small amount of debt. She is aware that in the event of her death, her debts could pass on to her family as well as her funeral costs. Therefore, she takes out a Whole Of Life Assurance Policy to protect her family. The policy will provide a lump sum to her family to pay her debts and her funeral expenses in the event of her death.