The foundation of any effective financial planning is to protect against unforeseen events that could affect a clients' standard of living.

It is important to consider protecting some or all of the following:

Your family in the event of death, serious illness or disability.
Your assets e.g. home and business interests.
Yourself, your partner and your estate should you require residential care in later life.  

This will ensure you, your family and your loved one’s way of life is protected should any of the events mentioned above actually occur.

Another popular service that we offer is our ‘protection review service’. This is where we look at a clients existing life insurance policies and conduct a review. During which we look at the cost of the plan, the type of cover and also advise on whether this is still suitable or indeed whether another type of plan would better suit your current requirements.

How do I appoint Alpha Financial Management to conduct a protection review?

Firstly contact us using the enquiry form below or call us on 0151 949 1666.

You will be appointed your own protection adviser who specialising in advising of the vast array of protection products available in the market.

Our fee guarantee: You will not pay any fees unless we can help you.

Term assurance or term insurance as it may also be known is designed to provide cash either by lump sum or regular payment in the event of death or critical illness during a specified period of time (the term).

There are differing types of term assurance and we have tried to cover each one below with their names and description of how the product works.

As with all types of term insurance additional benefits can be included such as critical illness cover, waiver of premium benefit and in cases of level term insurance, the indexation option, this is were the plan is designed to increase each year with inflation in order to protect the value of the cover for the beneficiaries.

It should be noted that all term insurance plans, should no claim be made, will cease at the end of their respective terms without value.

Level Term Assurance (LTA)
This provides the lump sum in the event of a claim being made under the terms of the plan. The payment that is made to the beneficiaries is by definition level throughout the term of the plan.

Decreasing term Assurance (DTA)
This type of insurance is more often used to protect mortgages; the level of cover will decrease as the term goes by therefore making it suitable for the likes of repayment mortgages.

There are actually other times that decreasing term insurance would be used other than a mortgage such as a Gift Inter Vivos policy: -

This is a type of decreasing term plan that actually reduces at the same rate as the chargeable inheritance tax on an estate as a result of a Potentially Exempt Transfer (PET).

For example if you gift part of your estate away before death then that part is classed as a PET, this means that for a period of 7 years there could be tax due on the transfer. This amount of tax reduces by a set amount each year for those 7.

The Gift Inter Vivos plan is designed to mimic that reduction to ensure sufficient money is available to meet the bill if the person who gifted the estate dies before the end of the 7-year point.

This type of insurance is very specialised and is used mainly in good Inheritance Tax Planning (IHT planning).

Convertible Term Assurance (CTA)
This is an option found more commonly on level term and refers to the ability to adapt the plan to the change in financial circumstances that clients have from the onset of the plan into the future.

First it should be noted that, due to the fact that term assurance will cease with no value at the end of its term, people consider it to be a "dead money plan" as if no claim is made the money is just lost.

The only alternative to this situation is a Whole of Life Plan as this type of plan builds up a cash value. However this plan, as a result of building a cash value, is somewhat more expensive than its term assurance cousin.

This is were convertible term assurance comes in. Convertible Term Assurance guarantees the policyholder the facility to convert the plan into a whole of life plan free of any underwriting. In some cases life companies will let you covert into other plans but generally this option is for the whole of life contract.

The benefit of this feature is simple, if you want the life cover now and are not happy with the "dead money" principle but your financial situation does not permit the additional expense at this time of a whole of life contract, then you take out a Convertible Term Assurance contract. You pay a very small additional cost to the plan but guarantee the option to convert into whole of life when the finances permit regardless of your state of health at that time.

This is quite a valuable benefit as term assurance by definition is for a specified term and whole of life assurance, is just that! Whole of Life.

Due to the future value of this benefit the life company will only give it to people who present an application on what they class as a standard basis which means fit and healthy at the outset of the plan.

Renewable Term Assurance (RTA)
Renewable Term Assurance is a similar sort of benefit to Convertible Term Assurance is so much that it guarantees something in the future without medical underwriting.

In short you take out your term assurance for a set term in this example we shall say 10 years but you include the renewable option. What will happen at the 10-year anniversary is you will be given the option to renew the plan free of underwriting so regardless of your state of health for a further 10 years.

Again due to the future value of this benefit the life company will only give it to people who present an application on what they class as a standard basis which means fit and healthy at the outset of the plan.

Family Income Benefit (FIB)
Life cover is taken out for many reasons but the two main ones are to protect a mortgage and to protect your family the latter is what Family Income Benefit or Family Income Plan is for.

When someone takes out life cover to protect their family they do it on the basis that should they die they want their family to have enough money to continue to live in the style they are accustomed to. In the past people have taken out lump sums that would eventually be invested to produce an income that the family would live off.

Taking such things as, inflation into account and the lack of investment expertise that an average family would have access to, presents a potentially dangerous situation for the family and as such they might not have the right money at the right time, which is the only point to having the insurance in the first place.

With this in mind Family Income Plans were born. They essentially provide an income on death for the term of the plan and as an additional benefit you can add indexation to the plan. This means that if the life assured is earning say £20,000pa and they want to protect that amount for the next 18 years till say there youngest child had left full time education they could have a Family Income Plan for £20,000 include indexation benefit. The result would be if they die during the term then £20,000 or the equivalent to that amount would be paid out to the beneficiaries and this would go up with inflation each year until the end of the plan.

The upshot of this is the family get exactly what they need when they need it without any of the hassle of investing money and hoping for good returns.

Again you can include additional benefits such as Critical illness benefit and waiver of premium benefit to the plan as required.

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