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Catastrophe Planning is the term we give to cover a number of eventualities, such as death, disability which will potentially stop future earned income. Because most people are reliant in there earned income to fund expenses, if this income were to stop how long could you maintain your current lifestyle before changes, often unwanted changes, would occur?
Insurance is what is used to transfer risk. If a loss of income through death or disability causes a financial risk to you and/or your family/dependents then you have a choice. Take the risk that this ‘catastrophe’ would not happen or transfer the risk to an insurance company and rather then paying a huge amount of money to do this, you just pay a relatively small premium each month and you keep the risk with them. With the knowledge that if the catastrophe occurs, you or your family/dependents liabilities are met.
So, what types of Insurance are available and how can a Lexington Wealth Management Financial Planner /Independent Financial Adviser (IFA) help you decide.
The levels and types of insurance chosen by clients varies greatly, some of the more common insurances are:
Mortgage Life Assurance
A life assurance plan, normally Term Assurance, which pays out and repays your outstanding mortgage balance so that your home is not at risk.
Famly Life Assurance
A life assurance plan, similar to above which would either pay a lump sum, or often an income to replace an income which has been lost through death.
For business assurance please refer to our Business Planning page by clicking here.
Critical Illness Insurance
Critical Illness or Serious Illness cover is a stand alone or optional add on to many term assurance plans which pays out a lump sum or income in the event of a diagnosis of a predefined listed critical or serious illness.
Income Protection
This insurance will replace a percentage of your income, after a waiting period, in the event of you being unable to work through accident, sickness or injury for a set term, or often to your planned retirement date.
Redundancy Insurance
This provides you with the peace of mind that in the event of a redundancy, your income can continue for up to 2 years.
Insurance Conclusion
As with all insurance there is a lot to know before you buy the correct one. Please contact us if you would like to discuss and receive advice on 01793 771093 or email here.
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