Super User

Super User

In order to buy insurance you must have an 'insurable interest', basically you have to own whatever it is you are trying to insure. In this case if you rent your accommodation you will not, in most circumstances, own the building. As a result you cannot insure it, you can only insure your own personal belongings within the building.

Wednesday, 20 March 2013 09:43

What is IPT?

IPT means Insurance Premium Tax. This is levied on insurance policies sold in the UK. Household Insurance is subject to IPT at 5%, Travel Insurance is taxed at 17.5%.

You would be wasting your money, by lying on the proposal form you would invalidate the contract between the insurer and yourself, so no part of the policy would be valid. This also means that if you have a mortgage on your property you are probably breaching your mortgage lender's terms and conditions by not having insurance in place.

Wednesday, 20 March 2013 09:43

How much should I insure my buildings for?

You must be careful with this - make sure that you do not insure your buildings for the market value of your property. You are insuring against the fact that the building has to be demolished, the site cleared and then your property rebuilt. You wont have to buy the land again, so as a result the rebuild cost is typically much lower than the market value. If you insure for the market value you are wasting your money and over insuring yourself! More information on rebuild costs can be found from the Association of British Insurers website http://www.abi.org.uk

At the time of your death your family will obviously be upset and whilst thinking about your insurance payout will probably not be the first thing they want to think about, it may be necessary to cover your funeral expenses or pay off your mortgage. As such it is important that the process for ensuring your family is paid quickly is in place.

Normally your life insurance payout would be paid into your estate and left to the process of probate to decide how it should be divided up and used. Unfortunately probate can be a lengthy process (at times up to 6 months) especially if your will is contested.

One way to avoid the probate procedure for your life assurance is by having your policy written into trust. Writing your policy into a trust allows you to nominate to whom the payout should be made, meaning that it is paid by the insurance company much faster to exactly who you intended it to go to.

As an added benefit, writing your Life Cover policy into trust can also help to limit the effects of inheritance tax on your estate because the payout would no longer form part of the estate.

Having your policy written into trust can normally be done at no extra charge as long as you include it on the application of the policy itself.

Wednesday, 20 March 2013 09:43

Can I protect my policy against inflation?

Your policy can include an option called index linking which allows it to increase on an annual basis to offset the effects of the years inflation and increases in the retail price index.

This is important because as time goes by the real time value of your payout will decrease. That is to say that what you can buy for £100,000 today will not be the same in ten years time. Index linking your Life Assurance policy will allow it to maintain that value.

Taking Life and Critical Illness Cover together can provide a great method of ensuring you are fully protected against the eventualities of death and contracting a critical illness such as a heart attack or stroke. It can also serve to reduce Critical Illness premiums compared to taking a Life Assurance and Critical Illness Cover separately.

Wednesday, 20 March 2013 09:43

What is Terminal Illness Cover?

Policies can include something called 'Terminal Illness Cover' which will allow, at the insurance companies discretion, a payout of your policy early if you are diagnosed with a terminal illness where you will die within 12 months.

This is offered as a goodwill gesture by the insurance companies to allow you the opportunity to settle your affairs and make your own arrangements before you die.

It is important to understand that this is not the same as Critical Illness Cover and will only be offered for conditions where your doctor has told you that you will die within 12 months.

Wednesday, 20 March 2013 09:43

Why do you need Critical Illness Cover?

Critical illnesses are more common than people tend to believe and can affect anyone at any time. A number of critical illnesses are being diagnosed at a younger age. In fact in 2009 the average age of critical illness claimants was just 44 years old.
Approximately 89,000 people under the age of 65 will have a heart attack in the UK this year. Up to half of these people won't return to work.
The most common cause of cancer for men aged between 20-39 is testicular.
Around 125 women are diagnosed with breast cancer every day in the UK.

Under normal circumstances you Life Cover will not pay out anything to you if you are ill. The policy is only designed to cover you for death and as a result will only pay in this circumstance.


*Please note we have updated our email address and trading style to LenRose Wealth Management but still under Active Financial Partners Ltd and part of the Harwood Wealth Management Group PLC.

The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.


Jonathan Hales

Independant Financial Advisor

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