British Pound Notes

FAMILY INCOME BENEFIT

If you think that your family will be unable to manage on the income, they have in the event of your death then Family Income Benefit is worth considering. Family Income Benefit is a term insurance which only pays out an income rather than a lump sum.

These plans will have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.

CRITICAL ILLNESS INSURANCE

Critical illness Cover is an insurance policy which is intended to pay out a lump sum if the policy holder suffers a critical illness and survives for at least 28 days after diagnosis.

The lump sum can be spent on anything but paying off your mortgage or improving lifestyle are the most important objective as you may not be able to work after suffering a critical illness. It is designed to provide people with mortgages some protection if the policyholder cannot work.

Critical Illness policies cover the seven core illnesses but often providers will include more critical illnesses in the policy, but this varies depending on provider.

Seven Core Illnesses:

  • Heart Attack

  • Kidney Failure

  • Stroke

  • Coronary artery bypass

  • Major Organ Transplant

  • Multiple Sclerosis

  • Cancer

There are over 200 variations of critical illness policies available, Thus, it is imperative that you speak to us so we can assess your needs and recommend the insurance that fits your needs. A critical illness policy is usually linked to a term life insurance policy.

Critical illness plans may not cover all the definitions of a critical illness. The definitions vary between product providers and will be described in the key features and policy document if you go ahead with a plan.

PROTECTING YOUR MORTGAGE

Mortgage Payment Protection Insurance (MPPI) covers the cost of your mortgage for a maximum of 12 months should you be unable to work in the event of an accident, sickness, or an unemployment.

One of our qualified Advisor are happy to advise and guide on all of the benefits that this type of insurance has to offer. You will also need to find out how much your employer will pay you in the event of unemployment such as redundancy. If you have worked for your employer for a long period of time and the benefit is high then there may not be a need to have the unemployment element of this insurance which would also help to keep the premiums down.

Although many policies backdate the day one of the claim most providers will not start paying until day 31 or 60 days. Payments can also be capped between £1500 – £2000 per month or as a percentage of your salary. For unemployment cover payments from the insurance company are not usually made until the first 3 to 6 months which means you must rely on savings to keep your mortgage paid.

If you receive any payments from your MPPI policy it may affect the amount of state benefit that you will receive. This type of policy looks very similar to Income protection which is often known as “Accident, Sickness & Unemployment” cover but that is where the similarity ends. Our Protection and general insurance advisors will advise which policy is best for you and what the main differences are between the two types.

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