Mike and Debbie – Remortgage and Protecting their Family
Soon after the birth of their second son, Debbie returned to work and her husband Mike became a stay-at-home dad.
Debbie had a generous employee benefit package and her income alone was still sufficient to pay for their lifestyle. Weighing up the cost of childcare, they could not see any financial benefit to Mike working. Mike and Debbie’s only liability was their mortgage and generally, they felt they were in a comfortable financial position.
Mike and Debbie’s main concerns were:
Well, they didn’t actually have any but whilst reviewing their mortgage we pointed out that when they originally took out their mortgage they did not take out separate life cover as they both had Death in Service which they felt would be sufficient.
However, their circumstances had since changed and now with Mike not working, in the event of his death or illness Debbie would unlikely be able to work in the same capacity or at least would need financial support as well as some form of childcare.
What we did for Mike and Debbie:
- Protected Mike’s life in the event of his death or critical illness
- Provided additional life cover on Debbie
- Put these plans into a Trust
- Recommended the couple remortgage to a five year fixed rate
Benefits for Mike and Debbie:
- In the event of death they both have more options to do things such as repay their mortgage or to supplement lost income, thus reducing the financial and emotional burden for their two boys.
- Even though they have a Will, the life cover will be paid without having to wait for Probate to be granted.
- They can now over-pay their mortgage by 10% each year.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Life cover (non-investment) and income protection
The plan will have no cash in value at any time, and will cease at the end of the term. If premiums are not maintained then cover will lapse. The above case study is intended for information purposes only and should not be considered as advice.
The policy of a critical illness plan may not cover all definitions of a critical illness. For definitions of illnesses covered please refer to the Key Features and Policy Documents.