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Bespoke Life Insurance

Life Insurance allows you to make sure your family or dependants are financially protected in the event of your death. Policies leave your loved ones with a lump sum or monthly payments over a specified period. Immediate financial commitments (mortgages & loan debts) as well as those in the future (university fees) are then covered and you relieve them of financial worry. Life insurance can also allow you to ensure your family can sustain the lifestyle you have already provided for them. If your children enjoy dance classes, or going on holiday, the payment from a life policy will mean they can continue these activities when you’re no longer there.

Insurance products have long been built with a focus on mass application, constructed to ignore the subtle differences between individuals and families. It’s an approach to product design that has, naturally, not always suited each unique consumer. At Halcyon Wealth we…

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Level and Decreasing Life Insurance are the two main types of Term Life Insurance. This means the policies last for a set term, covering you if you die within that period of time, and then end.

Level Life Insurance

Level Life Insurance is the simplest of these life products.

You choose a level of cover (e.g. £100,000) and a length of cover (e.g. 25 years) and should you pass away at any point during those 25 years the policy would pay out that chosen benefit to your loved ones.

Level term life cover is most commonly used to protect an interest-only mortgage or provide a level of family protection.

With an interest-only mortgage, where you are not repaying the capital the outstanding debt remains the same over the life of the mortgage, and therefore so should the amount of life cover.

Other uses include providing a level of family protection, setting up a policy with a level of cover which would help your loved ones through the difficult times to ensure any financial pressures are removed.

Decreasing Life Insurance

Decreasing Life Insurance is most commonly used to protect a repayment mortgage. The policy will be taken out for the length of the mortgage and the level of cover will decline over time in line with you repaying your mortgage and reducing this debt to zero.

Decreasing term insurance is the most cost-effective form of life insurance for repayment mortgages as the risk to insurer declines over time as the level of cover falls. As a result the monthly premiums are lower than a Level Life Insurance policy.

Most Life Insurance plans have the option of including Critical Illness Cover. Where Life Insurance only pays out on death, a Critical Illness plan pays out the sum assured should you be diagnosed with any one of the critical illnesses as defined by the insurer’s terms. These conditions include the likes of cancer, heart attack and stroke, which represent the top three claims on all such policies.

Given the risk of suffering a serious illness is a lot higher than that of dying, the monthly premium will increase to include critical illness cover in your policy. However, should you suffer a serious illness there are often lifestyle changes to make, whether that be reducing working hours, stopping work completely or modifications to your home which can all have a considerably impact on your finances. This is where Critical Illness Cover can step in to help.

Many individuals opt for Critical Illness Cover for the peace of mind it offers should something serious happen.

When buying level term life insurance, you can either get a single policy or a joint couples policy. If both you and your partner are getting life cover, a joint policy may be marginally cheaper than getting two single policies, but it will only pay out once, usually on the first death. You used to be able to get a policy paying out on the second death but they have now become incredibly rare.

Joint Policy: The Pros Joint Policy: The Cons
A joint policy is cheaper than two single policies. If you have dependants you will only get one payout, usually on the death of the first policyholder. Single policies, however, pay out twice.
If you are married but have no dependants it's much less hassle to set up a joint policy compared to two single ones. If you split with your partner you may have to cancel the cover (unless you're still on good terms) and buy two single policies, priced on your new age and health, which will be more expensive.
Two Single Policies: The Pros Two Single Policies: The Cons
Each policy will pay out on the death of each person, rather than just on the first death, which is what happens with a joint policy. So you get two payouts rather than just one. Two singles policies are typically more expensive than a joint policy.
If you split with your partner you would not have to buy a new policy. If you are married but don't have dependants you will only need one payout – to your partner. So there is no need for a second payout as there would be no one for it to go to.

Income Protection is another form of sickness insurance that you can buy separately from Life Insurance. While you can’t package it together with Life Insurance as you can Critical Illness Cover, it’s nonetheless a valuable benefit to consider. Income Protection is designed to pay out for anything that medically prevents you from doing your job – the illness / injury doesn’t have to be critical as defined by the insurer’s terms. It also pays out what some people may find a more manageable monthly income (a percentage of your pre-tax earnings) as opposed to the lump sum offered by Critical Illness Insurance.

We’re delighted to announce that Quilter Financial Planning has achieved first place in the FTAdviser’s annual Top 100 Financial Advisers list.

We’re very proud of winning this award, which recognises not only the growth of our Network over the past year, but also our continued commitment to providing quality face-to-face advice.

We’ve always known that we have the very best advisers in the market – and we’re delighted that winning this award underlines that.

HALCYON WEALTH LIMITED (Financial Conduct Authority No. 758949) is an appointed representative of Quilter Financial Services Limited and Quilter Mortgage Planning Limited which are authorised and regulated by the Financial Conduct Authority. Quilter Financial Planning Limited and Quilter Mortgage Planning Limited are entered on the FCA register under reference 440703 and 440718. The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.