Case Study: How I Helped a Blended Family of 8 Achieve Financial Security and Peace of Mind
Simon and Caroline contacted me for assistance with a remortgage and a Transfer of Title, moving the property from solely Simon’s name to joint names. Alongside this, they needed to review the financial protection they had in place for their family – Their existing policies had been set up by another adviser. Their primary goal was to ensure financial security and comprehensive protection for themselves and their children, and to do so within a budget they felt was affordable.
Customer Background:
Simon and Caroline, a couple with a blended family of six children, were looking to refinance their mortgage. They had specific financial goals, including leaving an inheritance for their children and securing their income in the event of illness or disability. Simon already had Life Insurance, Critical Illness Cover, and Income Protection, while Caroline had a Life Insurance policy, but her income was not protected.
Challenges and Objectives
Their four main priorities included:
- A review of their existing policies: Simon’s life insurance coverage exceeded the necessary amount to cover the mortgage, his Critical Illness Cover was not comprehensive as other policies on the market, and his Income Protection was limited to two years. Although Caroline had a Life Insurance policy it was not fit for purpose.
- Joint protection for their new mortgage: They needed a joint life and Critical Illness Cover policy for their new mortgage. They wanted to ensure the mortgage could be fully repaid in the event of their death or upon diagnosis of a serious illness.
- Inheritance for Children: They wanted to ensure each of their children would receive an equal lump sum in the event of their death and that their children were also covered for Critical Illness.
- Full-term Income Protection: They wanted to ensure both had Income Protection policies that covered them until retirement. They felt it was important that they could maintain their mortgage payments and other committed expenditure if they were unable to work due to illness or accident as their work sick pay was limited.
The Solution:
I tailored my financial protection recommendation for the specific needs of the family:
- Joint Life and Critical Illness Policy: I recommended a joint life insurance and Critical Illness Enhanced Plus policy with Zurich to replace their existing policies, covering their full mortgage amount:
| Life Insurance | Provides cover to help financially protect each other and their loved ones should they die or be diagnosed with a terminal illness. |
| Critical Illness Enhanced Plus | Includes 52 full payment conditions (including Cancer, Heart Attack and Stroke), 33 additional payment conditions (paying the lower of £50,000 or 50% of the current sum assured), 10 advanced payments that pay out on being placed on an NHS waiting list, and 16 benefit uplift payments that pay up to £200,000 on diagnosis under age 55, on top of their sum assured. |
- Sole Life Insurance Policies: I suggested a sole life insurance policy each with Children’s Enhanced Cover for Simon and Caroline, again with Zurich. This addressed their wish to leave a lump sum to their own children in the event of their death and provided critical illness coverage for them. It included:
| Children’s Enhanced Cover | Offers critical illness cover for 85 conditions (including cancer, bacterial meningitis and accidental hospitalisation) and child permanent dependence cover. It also includes benefits such as a children’s hospital stay benefit and children’s death benefit. |
- Full-term Income Protection: I recommended individual Income Protection policies for both Simon and Caroline, ensuring they would receive replacement incomes until their respective retirement ages:
| Simon’s Income Protection | Replacing his current short-term policy, which only paid out for two years, with a full-term policy ensures that Simon will continue to receive an income even if he is unable to return to work, providing him with long-term financial security and peace of mind. |
| Caroline’s Income Protection | With a full-term policy, Caroline now has the financial security she hadn’t previously had. This policy ensures that Caroline is protected with a reliable income replacement plan in case of illness or disability. |
- Policy Trusts: All recommended Life Insurance policies were written into Trust. This ensures that the proceeds would be paid out quickly to the beneficiaries without waiting for probate, providing immediate financial support and potentially saving on inheritance tax.
The Outcome:
Each of Simon and Caroline’s financial protection objectives were met. As a result of my recommendation:
- Simon’s Life Insurance was adjusted to an appropriate level, while ensuring comprehensive Critical Illness Cover.
- Their joint Life and Critical Illness policy provided peace of mind that their mortgage would be fully repaid in the event of their death.
- Each of Simon and Caroline’s children was assured of a lump sum inheritance along with their own Critical Illness Coverage.
- Both Simon and Caroline now have full-term Income Protection, securing their incomes until retirement.
- The recommended package was affordable and within their budget.
Conclusion:
This case study highlights the importance of personalised advice and comprehensive financial planning. By reviewing their existing policies and identifying future goals, I was able to provide Simon and Caroline with financial security and peace of mind for their blended family’s future.
If you are looking to review your mortgage or need comprehensive family financial protection, contact us today to find out how we can help you achieve similar outcomes. Alternatively, book your free initial consultation here. We’d love to help!
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