Critical illness insurance pays a one off lump sum, if you are diagnosed with a qualifying critical illness that is covered, during the term of the policy. The types and range of critical illnesses covered vary from company to company, so always we recommend you read the insurance companies key facts document before you apply for your critical illness insurance policy.

You can choose both the term of the policy and the level of cover, although some restrictions may apply.

Critical illness protection pays a lump sum on initial diagnosis of a qualifying critical illness. When you make a claim you are allowed to keep the policy pay-out even if you make a full recovery.

It can be built into another life insurance policy on a level term, decreasing term (mortgage life insurance) family income benefit (pays a monthly amount) or as a stand alone critical illness policy. Once you have made a critical illness claim it is normal that you policy will cease and other benefits will therefore cease.

Critical Illness protection policies vary but nearly always include certain forms of the following illnesses; heart attack, cancer, a stroke, kidney failure, coronary bypass or transplant. For full details on the cover provided it is advisable to compare the Key Facts document for each providers quotation produced.

The types and range of critical illnesses covered vary from insurance company to company, so we recommend you read the key facts document before you apply for your critical illness policy. Sapphire Mortgage can help you choose the right company and policy to suit your needs.

The concept of life insurance (also known as ‘life assurance’ or ‘term assurance’) is often difficult to comprehend. Nobody wants to think about death, but the reality is that our loved ones will need support after we have passed on. That’s why Sapphire Mortgages has produced an exclusive guide to help you make an educated choice on the type of cover you need.

Why do I need life insurance?

Coming to terms with the loss of a loved one is never an easy thing to do and adding financial burden to the grief can make coping increasingly difficult. It can help to support your family after you die, or even a business partner.

Among the reasons to take out life insurance could include:

• Mortgage repayments - do you wish to arrange for your mortgage to be paid off?
• Replacing the primary earner’s salary - ensuring the family does not fall on hard times after your death.
• Replacing childcare - the death of the primary childcare provider could lead to the need for childcare expenses.
• Education expenses - cover for school/university fees after the death of the primary earner.

Whether it’s about leaving your debts behind or ensuring your family can maintain the standard of living to which they were accustomed, it’s clear there are plenty of reasons to look for the best life insurance policy for your personal circumstances. Getting the best quote is an important part of finding the right policy. At Sapphire Mortgage we can advice and recommended the best choice for you.

Accident, Sickness & Unemployment insurance (ASU), can also be referred to as mortgage payment protection and will provide you with an income to meet your outgoings if you are off work sick, have an accident or are made redundant. It pays out a monthly benefit to cover your mortgage and other related costs.

You may choose the amount of benefit you would like to receive, although there are some limits on the maximum amount. The premium will be a percentage of the amount of monthly benefit you would like to receive. Benefits are usually payable for a maximum of 12 months.

Income protection insurance, also known as permanent health insurance or income replacement, provides a tax free income if the policy holder becomes unable to work through illness. An income is paid until retirement age, the end of the policy term or until the policy holder is able to return to work.

Permanent health insurance does not normally cover unemployment/redundancy.

There is a period following the accident or illness which must elapse before the policy begins to pay. This can range from a month up to two years and is known as the deferment period. Most income protection policies will give a stream of monthly tax-free payments equivalent to between 50% and 65% of gross salary, although some companies will offer up to 75%.

Premiums are dependent on the monthly income required, age, current state of health smoker status and occupation. The deferment period also affects the premium, with a shorter period resulting in higher premiums being required.

Many company pension schemes include some form of permanent health insurance as part of their benefits package. You should check you benefits package before applying for an Income Protection plan as these can affect your maximum benefits allowed.

What is buildings and contents insurance?

Buildings and contents insurance is placed under the bracket of home insurance. It is a combined insurance that will cover or replace any damage that might occur to the house or its contents, including loss. It is essential for all mortgaged houses, and the majority of other homeowners who do not have a mortgage will also have this type of insurance. It is possible to get the two insurances separately, although you will find that most providers offer them as a combined cover.

Buildings insurance – This insurance covers your house in case of a disaster where your house is so badly damaged that it needs to be completely rebuilt. The event which caused the damage must have been completely beyond your control, for example storm or flood damage, a major fire, smoke or explosions, water leakage/burst pipes, subsidence, or third party vandalism or damage etc. Mortgage providers will insist that you take out this cover, as it means they will be able to recover their losses in such events. It is like a type of security or collateral for the loan that they have given to you.

Contents insurance – This covers all items in your house which are not fixed to the property, for example your furniture, jewellery, appliances and clothing. Most of the available contents insurance policies will even cover things like the contents of your refrigerator and freezer! The cheapest type is indemnity insurance. This cover will replace exactly what was there before, so if you claim for a washing machine that was already three years old, you will be given a replacement washing machine that is three years old. The more expensive "new for old" option will give you a brand new replacement of whatever gets damaged or stolen, thus you would get a brand new washing machine. Contents insurance will cover you in most of the same situations as buildings insurance, but also includes theft. Again, any of these perils must have been beyond your control.

Why do I need this type of insurance?

Some mortgage suppliers will make this type of insurance compulsory when you take out a mortgage with them, to cover their loan. Otherwise, this insurance is highly recommended to protect you against unforeseen circumstances. Virtually every home in the country will have this type of insurance just for that reason, and it could end up proving to be very costly if you do not take the cover out.

Optional extras that you can add to your cover

As well as the basic cover, there are a number of optional extras, available for an additional price:

• Accidental building damage - This includes damage which you cause to the house, for example whilst doing DIY.
• Accidental contents damage - If you cause damage to any of the contents of your house by accident.
• Personal belongings - This will cover personal belongings, such as iPods, computers etc, regardless of whether they are stolen or damaged in the house.
• Home emergency - If an emergency, such as a burst pipe, occurs within the house, this type of cover will provide you with a tradesman that you can call out for free. It is usually 24 hour cover, and will generally only cover you for a certain amount of work, on average up to £250 (including call-out charge, materials and labour).
• Legal expenses - Some buildings and contents insurance will also cover you if an accident occurs within your house or on your property, and another person is hurt. This legal liability, although rarely needed, could cover you in situations where people will sue if the accident was caused by something or someone within the house.