My client, Anne (39), is a divorced accounts executive with two primary-school-aged children. Her widowed and retired father, Brian (66), also lives with the family, and takes a significant role in childcare, allowing her to work full-time. What protection issues should she consider for the family, including her father? There are no health issues and no existing policies in force.
Peter Lurie, Proactive Medical and Life
Anne is clearly the figurehead of the family and needs to make sure that her children are correctly protected, especially as she is divorced. Her main priority would be to cover her children with facilities for medical cover, preferably with savings plans attached which allows clients to save and have medical cover at the same time.
If the cover is not used, when the children reach a mature age the savings can be passed onto them. Her worries will be heavily reduced on two scores – medical cover and possible future savings. Her next priority would be to make sure she has sufficient personal life cover in place specifically for her children, term assurance would be advisable together with substantial income protection. However, she may want to consider a shorter benefit policy that focuses on bills and daily expenses or an ASU plan, rather than a more expensive longer term income protection policy which could be very expensive, helping her if she found herself in a position of not being able to work.
Her other focus could be to discuss employee benefits at work. Anne should also consider her father’s protection needs and look at a fifties plus life insurance plan as well as a value plan like the Pruhealth medical scheme which will cover the more serious worries like Cancer and Heart Disease. All of these considerations help in keeping costs down and would be straight forward to set up as there are no pre-existing health issues.
Ros Woodjetts, Fortis
As Anne has dependant children and a parent who may become dependant, she should act now to avoid increased costs of insurance in the future due to age or changes in health.
As Anne is likely to have a limited budget, the most cost effective option to safeguard her family would be Fortis’ Real Life Cover, which is a single policy designed to cover most situations. This would pay a set amount on the diagnosis of Cancer, Heart Attack or Stroke and provide income protection for any other long term sickness, as well as paying the full sum assured on death. In addition, if Anne had to give up work because one of her children became incapacitated she could receive an income protection benefit as part of this cover. By adding optional Unemployment and Extended Carer’s cover, Anne could also protect herself in the event of having to give up work should her father become incapacitated.
If budgets were less limited, Anne could consider more comprehensive cover for herself and her dependants using the term assurance, critical illness and income protection elements of the YourLife Plan menu product.
Insuring her father’s life and that of her ex-husband should be considered. Assuming her father is in good health our YourLife Plan life cover would cover him until age 90. The policy could be written in trust for Anne and her children to avoid inheritance tax and probate. Anne’s ex-husband should be asked to consider providing cover, again written in trust for the children.
Richard Wyatt-Haines, Pioneer
Having two young children and one earner in the family, Anne’s initial priority should be protecting her income, which is likely to be paying all of her essential bills (mortgage, council tax, heating etc.), so I would recommend that her number one purchase should be an income protection plan.
As an accounts executive, she is likely to have a range of good quality policies to choose from at competitive rates, however, it is important that cost isn’t the only factor she considers.
The reliance on her earnings being the only income means she has to focus on a quality plan that pays out, and an ‘Own Occupation’ definition is essential.
It is also important that the plan doesn’t have a range of exclusions.
I would look for a provider who releases annual claims statistics and include these figures in my thinking; the acid test of any protection plan is at claim, so the more work research up-front, the easier and less stressful any claim is likely to be.
In addition, Anne should place a priority on life cover so her children can be looked after financially if the worst should happen.
She may want to consider the same for her father, as she is reliant on his childcare to enable her to keep working.
If either or both of these options prove too expensive, Family Income Benefit could be explored which is often overlooked but can provide a good and often affordable alternative.
