Life Assurance

Sunset, Paragliding, Sky, Parachute

Life Insurance is like a parachute, if you don’t have it the first time you need it, there will likely be no second chance!!!

The importance of Life Insurance is often not realised by many until it’s too late. If you can relate to this and would like more information, you should be speaking to ABFM.

Email or call 01419565525 to speak with us and we will be more than happy to have a chat.

Watchdog finds over-50s misled by funeral cover claims

Just a point to note from last weekend’s Telegraph.

People aged over 50 are being misled by life insurers that imply their policies will cover funeral costs in full but instead leave families with bills to pay, according to an Article in the said newspaper.

As a result, the Financial Conduct Authority has issued a warning to firms that offer life cover for the over-50s but do not meet fair promotion rules. Adverts often refer to providing “peace of mind” to those left behind by ensuring they do not have to pay for “funeral and associated costs” but actually may not cover the costs of funerals in full.

The regulator said: “The financial promotions team has seen promotions for life policies for the over-50s where we believe consumers could be misled into thinking they are buying a policy that will cover their funeral costs. If a firm’s promotion includes product features or benefits, these must be presented in a fair, clear and non-misleading way taking into account the target audience.”

I’ve seen adverts on TV which state that no underwriting is necessary and the client will get a Guaranteed Sum on death.  Just remember, you get nothing for nothing and the pay out from these type of plans are small by comparison with a properly underwritten Plan.  Sometimes even there is no pay out in the first two years.  Beware.

Please, take advice from a Financial Adviser who is  regulated by the Financial Conduct Authority and who authenticity can be verified.



Unheard of tax costs households over £200 per year

Did you know that Insurance Premium Tax (IPT) costs each household more than £200 per year, and raises more than beer and cider duty, while also rising faster than taxes on cigarettes, despite half the population having never heard of it.

Levied at 12% on most general insurance premiums, IPT has doubled in the past three years, which has resulted in policyholders paying on average 6% more for insurance than they did in 2015.

When this is put into perspective, health insurance today costs on average £117 more per year than it did three years ago, while comprehensive motor cover has risen by £25 and pet insurance is up by £20.

Furthermore, experts are concerned that Chancellor Philip Hammond may increase tax rates again in this month’s budget on 29 October.

The think tank, Social Market Foundation, has also claimed the tax disproportionately affects the poorest in society.

Its analysis of data from the Office for National Statistics has revealed that the poorest 10% of society spend 3.1% of their disposable income on insurance, excluding life insurance, which is exempt from IPT. When comparing the two, the richest 10% spend just 1.7% of their disposable income on insurance.

However, it is not only households who have been feeling the strain since the tax has doubled. Zurich Municipal revealed that a quarter of public services and charities have cut their level of insurance since 2015, when the tax was set at 6%.

The survey further found that almost two-in-five public and the like organisations had to make difficult decisions to cut budgets in their organisation, while nearly one-in-ten had to make job cuts in order to meet insurance costs. One-in-five have comparably less cover in place as a result of the IPT rises, leaving them exposed to higher expenses from claims.

Just to be clear, Life Assurance is exempt from IPT!

Shocking Stats Identified by HSBC

Only 7% of people in the UK who support someone financially have spoken with a professional adviser about long-term financial protection, according to new research by HSBC.  In the UK, 27% of the population who are supporting someone financially, have never had a conversation with anyone about long-term financial security should something happen to them, not even friends and family. 

Despite a reluctance to seek professional advice regarding financial protection for themselves and their family, 74% of UK respondents rated their family’s health and wellbeing as the most important thing to them for the future.

 HSBC’s chief executive officer for UK Insurance Mark Hussein said: “Life carries many risks which can put people’s financial security under pressure, especially for those supporting someone. While it’s understandable that many people don’t want to talk about how their families would manage without financial protection, it’s an important conversation to have.  “We feel that advisers play a vital role in helping customers look at what they have achieved so far in their lives and then advise them on how they can protect it.”

The question is, have you had that conversation with an adviser?