BUILDINGS & CONTENTS
Most mortgage lenders require adequate buildings insurance in place before issuing you a loan. The result is that buyers often rush through this stage in a panic, settling for the first policy they find online. Generally, people only discover their protection is inadequate once the worst has happened.
Buildings insurance covers the structure itself, including permanent fixtures or fittings and outbuildings, while contents insurance takes care of your furniture and personal items within your property. Policies typically protect against:
- Loss or theft
- Fire, storm or flood damage
- Water leakage or burst pipes
If your children, partner or relatives depend on your income to cover a mortgage or other expenses, life insurance is something you should consider. Even if you and your partner are both employed, or if you are a stay at home parent, the financial impact of your death could leave your family unable to cover mortgage payments and other costs. Some of the most common types of life insurance include:
- Level term insurance – if you die within the term of policy, the total sum assured is paid out to your family.
- Decreasing term insurance – the level of cover decreases over the term of the policy. This type of insurance is typically used to run alongside a mortgage.
- Family income benefit – a specified monthly income is paid to your family if you die within the term of the policy.
- Life insurance in Trust – a trust structure can be hugely beneficial from a tax planning point of view.
CRITICAL ILLNESS COVER AND INCOME PROTECTION
If you become extremely unwell, critical illness cover (CIC) pays out a tax-free lump sum depending on the severity of your condition. CIC is designed to offer some financial support and peace of mind in the event of your illness, to alleviate any added stress caused by meeting mortgage payments or other costs.
In the event of an accident, or illness, income protection will pay out a proportion of your monthly income until you can return to work.
Please note, tax treatment depends on individual circumstances and can be subject to change in the future.