Mail us oninfo@vsurefinancial.co.uk
Get in Touch+44 (0) 7825250155
Get a Quote

Service Category: Protection Service

Home Service Category: Protection Service

Life Insurance (sometimes known as Life Assurance) helps provide financial security for people who depend on you, should you die.

Although money can’t replace a loved one, it can help those left behind to weather the financial storm. For example, it could pay off the mortgage or provide an income to help cover regular household expenditure.

Types of Life Insurance

Term Insurance

This is the simplest type of Life Insurance. You choose how long you’re covered for, eg. 20 years (the term), and the policy pays out if you die within the agreed term. You can also take out term cover as a couple, with the policy paying out on the first death only during the term. There are several different types of Term policies available, depending on your needs.

Family Income Benefit Insurance

This is essentially the same as Term Insurance, but instead of paying a lump sum when you die, it will pay out a regular income instead. This type of payment may be more suitable where the main purpose of the policy is to provide ongoing financial support to dependents.

Whole of Life Insurance

this pays out a lump sum when you die, whenever that is, as long as you are still paying the premiums.

Other Personal Protections

Life Insurance
Personal Protection

Life Insurance

Home and Contents Insurance
Personal Protection

Home and Contents Insurance

Income & Accident Protection
Personal Protection

Income & Accident Protection

Critical Illness Insurance
Personal Protection

Critical Illness Insurance

Your home is more than just bricks and mortar. It’s the result of years of hard work; a place where memories are created, and a home for valued and treasured possessions. Making sure you have the right insurance for your home could provide real peace of mind.

Choosing a Home Insurance Policy

Every household is unique, and what benefits your neighbour may not necessarily benefit you. Here are some key points to consider when choosing a policy:

 

Buildings Sum Assured

This should be enough to cover the full cost of rebuilding your property. The rebuilding cost is not the same as market value, and may change if you extend or alter your property.

 

Alternative Accommodation

Knowing your policy includes alternative accommodation can be reassuring should you need to leave your property, due to an event like flood or fire.

Contents Cover

Many insurers offer a standard level of contents cover (eg. £35,000). This may seem like a lot, but it’s surprising how the value of your possessions, including things like your music collection and clothes, can quickly add up.

Accidental Damage Cover

Policies will automatically cover you for the consequences of certain events (eg. flood and fire), but not accidents. You may therefore want to find a policy that includes accidental damage cover.

 

Cover Away From The Home

If you take your valuable items away from your home, you may want to consider covering your personal possessions separately under your Contents policy.

 

 

It Might Not Pay to Save

Many insurance companies promote their Home Insurance products based on price. While it might be tempting to go with the cheapest premium you can find, it may not actually provide the right level of cover for you and could include hidden excesses. Insufficient cover could leave you significantly out of pocket when you need to make a claim.

 

How to Measure Quality of Cover

Just like the hotel industry, many Home Insurance policies are star-rated based on the quality of cover provided. This star system is operated by independent research firm Defaqto.

One or two-star products will offer simple, basic cover. A four or five-star product will deliver higher levels of cover, with additional benefits.

Buying Online

While the internet may seem a quick and easy way to arrange Home Insurance, be careful. Many websites apply default settings to generate the cheapest quotes. However, these default settings may not be right for you and the level of cover you need.

Other Personal Protections

Life Insurance
Personal Protection

Life Insurance

Home and Contents Insurance
Personal Protection

Home and Contents Insurance

Income & Accident Protection
Personal Protection

Income & Accident Protection

Critical Illness Insurance
Personal Protection

Critical Illness Insurance

Accident Protection

By predicting the future, we could plan ahead and make life a little bit easier. Unfortunately, we all know life isn’t like that.

Whilst you can try to reduce the chance of being involved in an accident, there is no way of eliminating the risk entirely. What would you and your family do if an accident prevented you from working? Worse still, how would your family cope financially if this resulted in permanent disability?

Accident Protection is specifically designed to give you financial protection by providing a cash lump sum if you were to suffer from a specified accidental injury.

Income Protection

Income Protection Insurance pays out a regular tax-free monthly income to replace your income should you become unable to work because of accident or sickness.

If you suffer an injury or become ill during your working life, an Income Protection policy can help protect against any possible loss of income. It can help you keep up with your essential bills and other living costs until you’re able to return to work (subject to policy type taken).

Policies usually have a waiting period before they start paying out, which starts when you become unable to work. By choosing a longer period, the lower your premium. In order to choose an appropriate wating period you must find out what state benefits might be available and what your employer would pay you.

The premium you’ll pay will vary depending on your age, health and the level of income you wish to protect.

Other Personal Protections

Life Insurance
Personal Protection

Life Insurance

Home and Contents Insurance
Personal Protection

Home and Contents Insurance

Income & Accident Protection
Personal Protection

Income & Accident Protection

Critical Illness Insurance
Personal Protection

Critical Illness Insurance

Critical Illness Insurance pays out a tax-free lump sum on the diagnosis of certain life-threatening or debilitating (but not fatal) conditions including heart attack, stroke, cancer and major organ transplants.

This list will vary depending on the insurer, as will the exclusions for making a claim.

Critical Illness Insurance often comes as an optional addition to a Life Insurance policy, but can also be purchased on its own.

Policies usually only pay out once, so they don’t necessarily replace your regular income, but you can use the money towards medical treatment, your mortgage or anything else you choose.

Many people buy Critical Illness Insurance when they take on a major commitment, like a mortgage, or start a family. However, since we’d all like to have our financial commitments lightened if we were to suffer a serious illness or injury, the cover is relevant for most of us at any time.

If you already have Critical Illness Insurance you should think carefully before you cancel your existing policy and take out a new one.

For example, if you’ve developed any illnesses since you first took out the policy, you may lose some of the benefits when you replace it. That’s because pre-existing medical conditions may not be covered by the new policy.

Other Personal Protections

Life Insurance
Personal Protection

Life Insurance

Home and Contents Insurance
Personal Protection

Home and Contents Insurance

Income & Accident Protection
Personal Protection

Income & Accident Protection

Critical Illness Insurance
Personal Protection

Critical Illness Insurance

A Relevant Life Plan is a death-in-service benefit taken out by a company on behalf of an employee.

This type of policy pays a lump sum if the employee dies during the term of their employment. More often than not, a Relevant Life Plan also provides a payout if the employee is diagnosed with a terminal illness. It is important to note, however, that terminal illness claims will not be paid in the last 12 months of the policy.

What are the main benefits?

For the Employer

The premiums may be treated as an allowable expense in calculating your tax liability.

Unlike a registered group scheme, these policies have no effect on the amount of money you can contribute to or accumulate in your pension scheme.

For the Employee

Relevant Life Plan policies are often tax-efficient for high earners. This is because the premiums are paid by the company, meaning they are not usually liable to employee income tax.  Premiums/benefits don’t count towards the employee’s annual or lifetime allowances for pension purposes and the plan isn’t classed as a registered pension plan meaning membership won’t cause loss of certain lifetime allowance protections.

In addition, the benefits are, in most instances, paid free of inheritance tax – provided they are paid through a discretionary trust.

Who might Relevant Life Plans be suitable for?

  • Small Businesses that have a small number of employees and do not qualify for group life schemes
  • High-earning employees or directors who have substantial pension fund savings. A Relevant Life Plan means their death-in-service benefits do not impact their pension allowance
  • Members of group life schemes who want to top up their benefits beyond the scheme rules

There are some individuals for whom Relevant Life Plans are usually not suitable. They include the self-employed, equity partners or members of limited liability partnerships.

Are there limits to the cover?

In order for the employee to qualify for the tax concessions, certain rules must be satisfied:

  • the cover must be paid in a single lump sum before the age of 75
  • only death benefits can be provided
  • benefits should be paid through a discretionary trust
  • beneficiaries should be restricted to the employee’s family members and dependents
Other Business Protections
Relevant Life Plan
Business Protection

Relevant Life Plan

Partnership Protection
Business Protection

Partnership Protection

Key Person Insurance
Business Protection

Key Person Insurance

Shareholder Protection
Business Protection

Shareholder Protection

The Value of Protecting Your Partnership

One of the great risks of a business partnership is that one of your colleagues may die, with his or her share of the business passing to someone else. That person may have little interest in the business or – at worst – may be hostile to your objectives. Equally a partner who suffers a serious illness may want to retain the option of continuing in the business or be compensated for their exit from the business.

The safety net is a pre-arranged scheme to ensure the surviving partners have enough funds to buy out the interest in the business or compensate the deceased’s family.

The following range of options should be considered:

  • Appropriate life cover to fund the purchase of the deceased’s interest in the business
  • Advice on a suitable agreement to ensure the partnership continues and the deceased’s dependents or family members are compensated
  • Arrangements for partners who retire, or who fall seriously ill and are unable to work

Benefits to Partners

In the event of the death or serious illness of one of your partners, you’ll want to ensure that the business continues as smoothly as possible. Partnership Protection sets out the procedures and policies to help you retain control:

  • Agreements, insurance, and trusts can be established to protect the business against the financial and practical implications of a partner’s death or specified critical illness
  • Arrangements which can help to ensure your partnership is not automatically dissolved
  • Helps to protect your business interests against hostile parties, or disinterested inheritors
  • Funds available to buy out the deceased’s interest in the business at fair market value
  • Continuity of business prosperity
  • Avoid the sale of assets to repay the departed partner’s interest in the business
  • Help retain confidence of employees and customers
Other Business Protections
Relevant Life Plan
Business Protection

Relevant Life Plan

Partnership Protection
Business Protection

Partnership Protection

Key Person Insurance
Business Protection

Key Person Insurance

Shareholder Protection
Business Protection

Shareholder Protection

Key person insurance is an important form of business insurance. There is no legal definition for “key person insurance”.

In general, it can be described as an insurance policy taken out by a small or medium sized business to protect that business from potential financial losses that could arise from the death or extended incapacity of the member of the business specified on the policy. The policy’s term does not extend beyond the period of the key person’s usefulness to the business.

The aim is also to help protect the profits and facilitate business continuity. Key person insurance does not indemnify the actual losses incurred but provides a fixed monetary sum as specified on the insurance policy upon the insured person either dying or suffering a critical illness as defined in the insurance policy terms & conditions.

An employer may take out a key person insurance policy on the life or health of any employee whose knowledge, work, or overall contribution is considered uniquely valuable to the company. The employer does this to offset the costs (such as hiring temporary help or recruiting a successor) and losses (such as a decreased ability to transact business until successors are trained) which the employer is likely to suffer in the event of the loss of a key person.

Who Can be a Key Person?

A key-person can be anyone directly associated with the business whose loss can cause financial strain to the business. For example, the person could be a director of the company, a partner, a key sales person, key project manager, or someone with specific skills or knowledge which is especially valuable to the company.

Taxation Aspects

Based on a set of principles laid down in 1944 by the then Chancellor of the Exchequer, Sir John Anderson, the premiums paid will be allowed as a business expense for corporation tax purposes provided that:

  • The only relationship between the proposer and the life assured is that of employer and employee (except in the case of shareholding directors – see point 4 below).
  • The policy is designed to cover loss of profits only.
  • The policy’s term does not extend beyond the period of the key person’s usefulness to the business.
  • The employee does not hold a significant shareholding (less than 5% is probably insignificant).

If the premium is a permitted allowable expense, then the policy proceeds would normally be subject to taxation. However, there are no hard and fast rules regarding the tax treatment of premiums and benefits, and each case should be referred to the local Inspector of Taxes for guidance.

It is not the case that if the business decides not to apply for tax relief on the premiums, any proceeds will necessarily be tax-free. The taxation decisions rest with HM Revenue & Customs, and there are reported cases where the Revenue has taxed benefits on which the premiums did not obtain tax relief.

However, such policy proceeds should usually escape tax, unless the proceeds are payable in instalments. As above, each case should be referred to the local Inspector of Taxes for guidance before the policy is implemented.

It is therefore very important that the effects of taxation should be considered when setting the sum assured on key person cases.

Other Business Protections
Relevant Life Plan
Business Protection

Relevant Life Plan

Partnership Protection
Business Protection

Partnership Protection

Key Person Insurance
Business Protection

Key Person Insurance

Shareholder Protection
Business Protection

Shareholder Protection

For many business owners, running a company is a time-consuming and complex affair. Attention is rarely paid to what might happen if a shareholder dies, or becomes seriously ill.

In the interests of financial security, business stability, and continuity particularly for private limited companies where there may only be a small number of principal shareholders  it is essential to provide a safety net following the loss of a shareholder:

  • Shares may go to the deceased’s family, who may have little interest in the business and would prefer a cash sum
  • The other shareholders may want to retain control by buying lost shares – but may not have the resources to do so
  • The shares may be taken over by someone who does not share the company’s objectives – and may even be a competitor

An adequate Insurance Policy allows for sufficient funds to be available in the event of the death or specified critical illness of a shareholder. This ensures that the company can continue to operate unhindered while the outgoing shareholder or their family receive fair compensation.

It provides documentation to enable the surviving shareholders to receive the funds free of tax under current legislation (as at 2020/21).

Benefits for Shareholders

In the event of a shareholder’s death or specified critical illness, one of the most important things to your business is to ensure continuity. Shareholder Protection sets out the procedures and policies to help ensure that you retain control, and have the necessary funds to do so:

  • Arrange for the most appropriate transfer of shares to surviving shareholders, or the company, at a fair commercial price
  • Set up insurance policies to provide the funds to purchase the shares
  • Avoid having to draw on funds set aside for other purposes
  • Prevent the sale of shares to hostile parties, or competitors
  • Documentation to enable all transactions to be made tax-efficiently
  • Help maintain business stability and continuity
  • Help retain confidence of employees and customers
Other Business Protections
Relevant Life Plan
Business Protection

Relevant Life Plan

Partnership Protection
Business Protection

Partnership Protection

Key Person Insurance
Business Protection

Key Person Insurance

Shareholder Protection
Business Protection

Shareholder Protection