• The most common reason for investing in life assurance will be to cover a mortgage but it is also part of the review we all undertake, perhaps after getting married or, more likely, when we have children
• For a single person with no dependents, life assurance may not be necessary
• If you have debts and no savings, then a small amount might be necessary to pay expenses and prevent someone else being landed with those debts
• If you have dependents, you do need to look at the consequences for them if your income ceased. How much do you earn? Do you have debts? How much is your mortgage or rent? Do you pay school fees? How long before your children will be working? Does your partner work? Could they continue to do so without your support? Even if you don't work, there can be a considerable cost involved in replacing your income, to look after children and/or the house
• Life assurance can be used in inheritance tax planning

• Permanent Health Insurance (PHI) is less well known than life assurance but potentially has more applications. What it does is replace your income in the event that you are suddenly unable to work
• Typically, you can cover up to three quarters of your gross income – less any state benefits for which you become eligible This income is paid until retirement age, until the end of the policy term or until you are able to return to work, whichever is the earlier
• PHI cover ensures that whilst you're recovering or coming to terms with life changes, your financial position is secure and you're able to maintain a similar lifestyle. This can be of particular benefit if you are self-employed and when your job does not come with any significant sick pay
• PHI is considered expensive insurance. However, it comes with a choice of deferment period and extending this to meet your own needs can reduce the costs. The more savings you have, the longer you can fund yourself before a claim needs to start paying out – and therefore the cheaper the policy will be
  

• Critical illness policies pay out in the event that you are diagnosed with a specified critical illness
• Like life cover it pays out a lump sum, the objective of which is to help you fund changes which may need to be made to your lifestyle as a result of that illness. For example, you may need to move house to be nearer to relatives or friends. You may need to make changes to your existing house to meet new mobility requirements
• Alternatively, you may simply want to give up worrying about money and make the most of your opportunities whilst you can
• Like PHI, Critical Illness cover can be just as beneficial, maybe more so, for single people with no dependents as it could be the only source of ongoing financial support in the event of serious illness
  

• According to the National Office of Statistics (23/10/2007), the proportion of people over the age of 65 will total almost 22% of the population by 2031
• As we get older, we need more healthcare – and we are more likely to require 24 hour a day support than the rest of the population
• The funding of long term care is one of the top political priorities. Arguments are already raging about both the quality of State care and the right of the State to insist on the sale of individuals’ assets – including the family home – to help with the increasing costs of provision
• Long term care planning is a specialist area of financial planning which is designed to ensure you can pay the cost of medical expenses or care home fees if you are no longer able to live independently
• There are many types of cover – from an immediate annuity, which pays an income to a care home in exchange for a lump sum, to a pre-funded insurance plan, where premiums are paid into a policy now, which will pay your fees in future – should they ever be required
• Long term care cover is relatively expensive – but this is because the fees in care homes are expensive and continue to rise

For more information on this aspect of "life insurance - what you need to know", please contact Cheltenham Independent Financial Advisers Limited on 01242 269656 or email us at info@cheltenhamifa.co.uk. One of our advisers will be happy to assist you.