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Sarah Tucker is joined by Gemma Sawyer to talk all about Life Insurance.
Gemma Sawyer works as a Protection Adviser at The Mortgage Mum, who alongside Carolyne Fairfulll, gives exceptional service when it comes to protection insurance. They are both wonderful people, both mothers, and both have lots of understanding and empathy for every situation that comes across their desks.
Gemma has kindly joined us for each of these three bitesize episodes to talk about Income Protection, Critical Illness Cover, and Life Insurance. Today, we are focusing on Life Insurance. If you have any questions following this episode, you can speak to Gemma, myself (Sarah), or Carolyne.
What attracted you to Life Insurance Gemma, and how long have you worked in the area?
I’ve worked in Life Insurance for about four years, and before that, I worked for a Mortgage Broker. The insurance side of mortgages feels really important, as you think about how you can help people, and make sure they keep their dream house, once they’ve bought it. As you get older and have kids, you start to worry about absolutely everything in life that you never think about when you’re younger.
When I was six months pregnant with my second daughter, my husband had quite a serious motorbike accident, he fractured his spine and had to have a major operation to insert some rods and some screws to hold him back together. He was in hospital for quite a while and it was quite a long recovery process.
That was a pretty life changing experience, and it was one of those things you just don’t see coming. One minute, everything is fine, the next life is completely up in the air. In those moments, nothing else matters, you don’t want to have to think about money, work, or anything other than the situation. Having that experience has really helped me think about the things you think can never happen, and realise the importance of Life Insurance.
Did you have protection in place?
No, we didn’t have that kind of protection. We had Life Insurance and Critical Illness cover, but not Income Protection at the time, so we had to get back to work very quickly. There were a lot of people that helped out whilst he recovered, but he had no choice. It was quite difficult.
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Does this factor into you being able to have these conversations with clients?
Yes, definitely. Noone wants to think about those situations, but it can happen to anybody at any point, and it might not be something you see coming. We have to have this horrible conversation, but it’s there, and if we put the cover in place, it’s going to be there when you need it most. We hope you never need it, but if you do, it makes such a difference.
What is Life Insurance and why is it so important?
Life Insurance is basically there to support the people around you. It doesn’t benefit you, but it benefits the people that you would leave behind, such as your partner, children and family members. It’s there so that if you die, then they would have money to support them through your loss of income so that they would not lose the mortgage.
It provides a lump sum of money that your loved ones can have to support them if they’ve lost you. When they’re already going through a tough time, at least the finances are taken care of, and the mortgage is cleared. There’s a little pot of money to potentially help out your children for their future.
This is particularly important when you’ve got a joint mortgage, because if you’ve used both salaries to get that mortgage, and one of you dies, the other person is potentially not going to be able to repay that mortgage on their own. Instead of having to sell that property at a really awful time, a simple thing like a Life Insurance policy would mean that your family can pay off the mortgage and stay in the house.
What about people with pre-existing medical conditions who assume or have been advised that they cannot get Life Insurance?
If you’ve ever had any medical problems, we would take as many details as we can, and we have underwriters that we can talk to. There’s lots of different companies that look at different issues, and we’ve got the knowledge of who’s good to go to.
Generally, there are lots of avenues for life cover, so we would always encourage anybody to come to us with pre-existing medical conditions, and sometimes even if they can’t get insurance straight away, we can find out if we could reapply in six months time.
How has Covid affected getting Life Insurance?
The good news is, they’ve paid out a lot of claims, so it isn’t always included, but it’s also not something that’s always excluded. In applying for Life Insurance, because it’s a new illness, there are not the stats available, so there is normally a clause where if you’ve had Covid in the last four weeks, you can’t apply for cover until that four weeks is up.
In the last couple of weeks, some companies have started to reduce that in line with the reduction of restrictions in the UK. One company in particular has dropped to ten days, which has been brilliant, because we can get some people covered a little bit earlier.
One of the big areas where Covid has had an effect is for people waiting for medical procedures, as it’s very difficult to get any cover until any outstanding medical issues are resolved.
How much does Life Insurance cost?
It’s very difficult to give a ballpark figure for life cover. Life cover itself is the cheapest kind of cover that you can get, so it really doesn’t cost as much as people think. It’s the cheapest kind of cover because you have the least chance of claiming on it, unlike Income Protection, and Critical Illness, where you have a high chance of claiming. It really depends on age, your health, whether you smoke, whether you go skiing or mountain jumping, so it’s tailored to your lifestyle.
How important is it to get a bespoke protection package?
It’s really important. We have so many clients that have cover that is very rarely what they actually thought they had, as there’s lots of different types of Life Insurance. You can have a decreasing cover, or level cover, and a lot of people might not know what’s best for them in their situation.
For family purposes, it’s really important to make sure that you’re getting exactly the right amount of cover for the right time for your individual situation and getting the term right for mortgage cover.
Speak to an expert
We will work at times that suit you and your family, carrying out appointments via video call, telephone or email, giving you the benefit of first class service, around your own schedule, and in the comfort of your own home. So let us handle your mortgage today and find out how well we can look after you, The Mortgage Mum way!
How does the Mortgage Mum help you to create a bespoke protection package?
We try to do everything with Zoom. We’re talking about things that are really personal, and you might not necessarily want to think about all of these things, so it’s nice to be as face to face as we possibly can be at the moment.
We’re available at any time of the day, whenever it suits, whether that be first thing in the morning, a lunch break or an evening when you get back from work. Not everybody likes Zoom, so we can do a phone call, but it’s nice to have face to face contact with the client.
Where does Family Income Benefit fit into protection?
Family Income Benefit is a form of life cover, so it pays out on death, and gives a monthly income for your family. It’s usually for people that have children to ensure that if you die, there is a pot of money to help your children until they are no longer dependent on your income. It can be used for their education costs, dance or swimming clubs etc, and it tends to last until they’re twenty-one, or twenty-two.
There would be an individual chat as to how long you think you would want your policy for, so if you died whilst your children are still dependent, there’s an amount of money paid to them each month just to help them to continue to do all of the things that they would normally do. It’s a form of Life Insurance that pays out monthly instead of as a lump sum.
You can have that in addition to the lump sum or instead of. It’s very popular to have your mortgage covered, and have the family income benefit alongside it. That way, if you die, your mortgage is cleared, but your family still has a replacement for your missing income to pay bills and help the children.
Where does Global Treatment fit in?
For a lot of people, insurance is not an expense that they were expecting, so to get a Life Insurance package and then add Global Treatment as a bolt on, is not appealing. Not everybody understands what Global Treatment is, however, and actually it can be very valuable for £4 per month.
If you’ve been diagnosed with something, you can go and get the best treatment around the world for that condition that you’ve got with Global Treatment. We love the NHS, and are so grateful to those who work for the NHS, but you hear stories that there are treatments that the NHS cannot afford to give, that actually would make life better.
We have to be open to the fact that there are better treatments available that the NHS can’t necessarily give us and that we’re not necessarily going to get access to them unless we have something in place to cover the expense. Not everyone can afford private health care, so Global Treatment is a great affordable way of making sure that if the worst happens to you or your children £4 a month can get you access to better treatment anywhere in the world.
How long should people get Life Insurance for?
It generally depends on what you’re looking to have the Life Insurance for. If you’re looking to cover your mortgage, it would be for the term of your mortgage. If you wanted to make sure that you can leave some money for your children, then you would look at cover that is in place until they’re of an age where they aren’t financially dependent on you anymore.
If you were looking to make sure that you could leave money for your children or loved ones you would look at longer term insurance, taking you into much older age. It depends on your circumstances and what you want that cover to do for you.
Useful Links
- Protection - An Overview
- Critical Illness Insurance
- Income Protection
- Wills and Trusts
- Home Insurance
- Business Insurance
- Private Health Insurance
- Find an Advisor
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