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Understanding your Insurance policies

Insurance policy

Part of good financial planning is making sure you have insurances to cover unforeseen circumstances. Enable’s IFA’s in Bishop’s Stortford can help you make sure you have the right insurance policies in place to cover any gaps in your financial plans.

It is very important to know your terms when it comes to insurance policies. It is usually best to make sure any insurance policy cost is fixed each month with ‘guaranteed premiums’. When you take out an insurance policy or buy level term cover – the official name for monthly insurance payments you will probably be given two choices of premium, guaranteed or reviewable.

If your premiums are guaranteed it means your insurer will never change the price. That way you will know what you are paying for over the life of the policy. Reviewable premiums, however, can cost less to start with, but later on, your insurer can push up costs, so check you know what you are letting yourself in for.

Check the small print

When it comes to life insurance it is worth checking the small print. If unfortunately you do die and your family needs to depend on your policy then any cash could form part of your estate. As part of your estate, it could mean that it is liable to Inheritance Tax.  In many policy cases, it’s possible to avoid this by writing the policy in trust at the time the policy is taken out. If you write in trust the insurance pays out directly to your dependents, so it never becomes part of your estate, which avoids inheritance tax and speeds up the payment. If you are unsure it is wise to get advice from an Independent Financial Advisor, such as Enable Independent.

What happens if your insurer goes under?

One question Enable’s IFA’s are sometimes asked is what happens if your insurer went under? The Financial Services Compensation Scheme (FSCS) should ensure you’re covered but always check new insurers to make sure they are the UK registered.  Or ask Enables’ IFA’s in Bishop’s Stortford to help you arrange the right insurance policies for you.

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Call Enable FLP today on 01279 755 950 to book your FREE consultancy and to find out how we can make your money work better for you. Alternatively, send us a message by clicking here and one of our financial experts will call you back