KEVIN Simpson from Blue Trust answers some commonly asked asked financial questions.
Q I have been advised by a friend to have Critical Illness insurance cover for my mortgage, what exactly is it and when would it pay out.
A It pays the full amount on the diagnosis of a specified Critical Illness such as cancer, stroke, heart attack, multiple sclerosis, or a number of other illnesses as outlined by the insurance company. I always recommend that if affordable and applicable to your situation, this should be taken out and set up to cover the mortgage alongside Life cover and Mortgage Payment protection, after all this is the biggest liability that most of us will ever have and given that it is normally to protect the home in your case, you should give serious consideration to purchasing this policy
Q I am thinking about taking out an Equity Release plan to give me some extra funds to do repairs to my property, can this be done?
A Unlocking the cash in your home can be one way to raise money but it will affect your estate and you should really discuss this with your family. This is a major decision and you need to go through all of your options with an Independent Financial Adviser to ensure that its the right move. Equity release is not for everybody so get all the information before you decide.
Q I have been told that I need to buy an Annuity with my personal pension, what exactly is an annuity and where do I get one?
A Basically an annuity is the exchange of a lump sum for a guaranteed regular income for the rest of your life. The amount you receive is based on your age and what benefits you require such as a spouses pension etc. You don’t have to take the deal that you current mortgage company offers but can use something called an “open market option” that allows you to buy your annuity from the provider that offers the most income to you. The downsides are that your income that you will receive is fixed at the outset (including any other benefits that have been arranged) so even if your circumstances change your annuity income will stay the same.
The above questions have been answered without the benefit of a full financial review being carried out to ascertain specific needs and circumstances. Each person’s circumstances are different and before individual advice can be given a factfind would need to be completed to assess a clients specific needs. It is always highly recommended that Independent Financial Advice is sought. All answers supplied by St Helens Based Independent Financial Advisers Bluetrust. To contact them telephone 01744 752209.
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Friday 24 May 2013
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