Protection advice that pays out when it actually matters
Nobody enjoys arranging protection. It is the part of financial planning that deals with the things you would rather not think about, and it is also the part that holds everything else up when a bad year arrives.
Most people have some cover. Fewer have the right cover
A great deal of protection is sold rather than advised, and it shows. We regularly meet people who are paying for too much of one thing and none of another, whose cover was set up around a mortgage that has since been paid down, or whose policy will pay to their estate rather than to their family because nobody mentioned a trust.
The other common pattern is the opposite: people who have life cover, which pays out only if they die, and nothing at all for the far more likely event of being unable to work for a year. Protection is about being honest about which risks would genuinely damage your family and covering those first.
We start by looking at what you already have, including anything provided through your employer, because there is no sense paying twice. Then we work out where the real gaps are, and what, if anything, you should do about them. Sometimes the answer is that you are already well covered.
Protection plans do not acquire a cash value. The cover provided will cease if premiums are stopped.
The four types of cover
Open each to see what it does and when it is worth having.
Life insurance
A lump sum for your family if you die
Life insurance
A lump sum for your family if you die
The foundation of most protection plans. If you die during the term, the policy pays a lump sum to the people you have named. What that money is for shapes the type you need.
Level term keeps the same amount of cover throughout, which suits a fixed legacy or an interest-only mortgage. Decreasing term reduces over time roughly in line with a repayment mortgage, so it is usually cheaper where the sole purpose is clearing the loan. Family income benefit pays a regular monthly income instead of a lump sum, which many families find easier to plan around than a large one-off payment.
Most households end up with a combination. Whichever you choose, writing the policy in trust means the money can reach your family quickly, usually without waiting for probate, and in many cases outside your estate for inheritance tax.
Please note that there is no pay-out of family income benefit if you die after the term of the policy, nor will you get your money back.
Critical illness cover
A lump sum if you are seriously ill and survive
Critical illness cover
A lump sum if you are seriously ill and survive
If you are diagnosed with one of the serious conditions listed in your policy, critical illness cover pays a lump sum. You can use it however you need: replacing income while you recover, adapting the house, paying for treatment, or simply removing money worries at a point when you have enough to deal with.
This is the area where advice makes the most difference, because policies vary enormously in which conditions they cover and how tightly they define them. Two policies with similar premiums can behave very differently at claim, and the cheapest is frequently the narrowest. We compare definitions rather than headline prices.
Critical illness plans do not acquire a cash value. The cover provided will cease if premiums are stopped.
Income protection
A monthly income if you cannot work
Income protection
A monthly income if you cannot work
Income protection pays you a regular income if illness or injury stops you working. It starts after a waiting period you choose, and continues until you can return to work or the policy ends. Longer waiting periods cost less, which is useful if your employer pays sick pay for a while.
It is the most valuable cover most people do not have. The usual reasoning is that they would cope, or that an employer or the state would step in. Employer sick pay is often three or six months, and statutory support is considerably less than most households spend. Your income is the engine behind everything else you own, and it is the thing least often insured.
Income protection plans do not acquire a cash value. The cover provided will cease if premiums are stopped.
Business protection
Cover arranged around the business, not the household
Business protection
Cover arranged around the business, not the household
Shareholder protection lets the surviving owners buy a deceased or seriously ill shareholder’s stake, funded by insurance and governed by an agreement signed in advance. Without it those shares usually pass to that person’s family, who may have no interest in the business and no way to sell.
Key person cover protects the business itself against losing someone it depends on, giving it money to trade through the disruption and recruit a replacement. Relevant life cover is a tax-efficient way for a company to provide death-in-service benefits for directors and employees.
Business protection is an area where the setup matters as much as the cover. The policies, the ownership and the legal agreements all have to work together, and getting one part wrong can undo the rest.
Protection plans do not acquire a cash value. The cover provided will cease if premiums are stopped.
The legal agreements surrounding business protection plans involve services that are separate and distinct to the services offered by St. James’s Place.
What you already have comes first
A short conversation
Who depends on your income, what you owe, and what would actually happen if it stopped. No obligation.
We audit the existing cover
Employer benefits, old policies, anything attached to a mortgage. Often there is more in place than people realise, and sometimes less.
The gaps, in order of importance
A written recommendation that starts with the risk that would hurt most, with costs shown so you can decide what to do and what to leave.
Trusts and paperwork done properly
We arrange the trust at outset rather than leaving it as a job for later, and we review the cover as your circumstances change.
Trusts are not regulated by the Financial Conduct Authority.
Arranging a mortgage at the same time?
Protection and borrowing belong in the same conversation. We advise on both, so the cover is sized around the mortgage you are actually taking rather than a generic figure.
Protection questions we are asked most
How much life insurance do I need?
Enough to clear what has to be cleared and replace what has to be replaced. In practice that usually means the mortgage, any other debt, and an amount that would keep your household running for as long as your family would need it. It is a calculation rather than a guess, and it is worth doing properly rather than picking a round number.
What is the difference between life insurance and critical illness cover?
Life insurance pays out when you die. Critical illness cover pays out a lump sum if you are diagnosed with one of the serious conditions listed in the policy and survive it. They protect against different outcomes, and many people need both, which is why they are often arranged together.
Why should life insurance be written in trust?
Because it means the money can reach your family quickly, usually without waiting for probate, and in many cases without forming part of your estate for inheritance tax. It is a straightforward step that is often missed, and there is no extra charge to arrange it at outset.
Is income protection worth it if my employer pays sick pay?
Usually yes, because employer sick pay tends to be far shorter than people assume, often three or six months. Income protection is designed to pick up after that and keep paying until you can return to work or reach the end of the policy term. We check what you already have through work before recommending anything.
Will a pre-existing condition stop me getting cover?
Not necessarily. It may mean a higher premium or an exclusion on that specific condition, and insurers differ considerably in how they treat the same history. Part of the value of advice is knowing which insurer is likely to take a reasonable view of your circumstances.
What is business protection?
It is cover arranged around a business rather than a household: shareholder protection so surviving owners can buy a deceased owner’s shares, key person cover to protect the business against losing someone critical to it, and relevant life cover as a tax-efficient way to provide death-in-service benefits for directors and employees.
Let’s find out what you actually need
A short conversation to understand what you already have, where the gaps are, and what, if anything, you should do about it. No obligation, and we will happily tell you if you are already well covered.