Life Assurance

familyHaving the foresight to know when we will die and to be able to plan precisely would be the ideal scenario but as we all know life is finite and we do not know at which point our candle will burn out. However we can make specific arrangements to protect our dependents and loved ones should our life come to an abrupt unexpected end. There are several plans available - each designed to protect different scenarios. There are plans which will pay out on death whenever it will occur (whole of life plans) and others which will pay out the benefit should one die in a given period (Term plans)

Level Term Assurance

Level Term Assurance plans are often used to provide financial protection while there are dependent children who would be financially disadvantaged should one or both parents die. In some cases there is life cover, through the employer, called 'Death In Service' which may pay out up to four times the gross salary. This is not something you should rely on as, in reality, most people are sick for a period of time before they die. Their employer may dismiss them after a period of time or they may be pensioned off or they may simply move to a new employer who does not offer this benefit. It could be quite easy to simply lose this benefit 

Decreasing Term Assurance 

This type of plan is normally used in connection with a capital repayment mortgage. The level of life assurance decreases along with the capital repayment element of the mortgage. It often doesn't guarantee to repay the mortgage exactly given that future interest rates may change your repayment structure. However this is the most cost effective life assurance plan 

Family Income Protection  

As the title implies these plans are designed to pay income in the event of death These will pay an agreed amount of income to replace the income which may be lost through the death of a provider

Taxation

If these plans are held by individuals (and not through a company) then the payments from these plans are free from income tax and capital gains tax.

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OnTrack Financial Planning Ltd. is authorised and regulated by the Financial Conduct Authority FCA Firm Number: 566312
Registered in Scotland, Registered No.SC406825, Registered Address: 6 Wallace Brae Grove, Reddingmuirhead, Falkirk, FK2 0FF.