Beverly, 42, earns £44,000 working as an architect for a large building company. She has nerve damage in her right arm caused by a car accident a few years ago for which she was not at fault. She is divorced with custody of two children aged 11 and 14. She does not smoke but does drink the equivalent of two bottles of wine a week. For exercise, she attends two gym classes. What cover would you recommend?
Dale Tranter, Sesame
Beverly's prime need - with no earning partner - is for income protection (IP), particularly given the nerve damage to what is probably her ‘drawing' arm. As it is not impeding her work, she should not find the latter a barrier to obtaining cover.
Beverly's death is much less likely but would be far more devastating. A lump sum term assurance would settle any outstanding debts such as a mortgage while, to save money, a 10-year family income benefit (FIB) would run until the younger child is 21 and out of full-time education. She might also want to consider critical illness (CI) insurance. If she took CI and IP with Scottish Provident, she would also get children's income benefit free. This provides some cover if she had to be off work to look after a seriously ill child.
Her wine consumption is insufficient to warrant a loading on IP or life cover. Furthermore, her two gym visits a week- if she goes to the ‘right' gym chain and maintains a healthy lifestyle - may be enough to make the PruProtect product a possible alternative recommendation.
Given the current state of the building industry, she might want to consider unemployment cover, although that sector's problems may make obtaining cover - or receiving benefit in view of the common ‘impending unemployment' clause - difficult. Finally, if she receives maintenance, she may want to consider a life of another policy on her ex-husband. Writing it on a contingent basis or via an FIB would again keep the cost down.
Aidan Dewhurst, Progress from Royal Liver
Beverly requires flexibility so Progress from Royal Liver's menu plan could be tailored to reflect her needs and circumstances.
As she has children, a sensible starting point would be FIB written on an escalating, split trust basis, over a 10 and seven-year term. This ensures that in the event of Beverly's death, there would be an income for both children up to the age of 21. If it was taken out with CI, Beverly would receive a lump sum if she suffered a serious illness or injury.
To protect against longer-term loss of earnings, IP could be added. Progress from Royal Liver's range of deferment periods offer premium flexibility in line with Beverly's expectations and, to maximise the benefit, she could include a waiver of premium option.
The good news is that, as an architect, she will probably receive an occupation class one rating, which means claims would be evaluated on whether she could continue working in her ‘own occupation' rather than ‘any occupation'. Our underwriting would include asking a few questions regarding the nerve damage but, unless there have been recent recurring symptoms, then it is likely that she would be accepted on standard rates with no exclusions. At Progress, IFAs also have the opportunity to speak to an underwriting helpline before submitting a case - so if they want to weigh up the options in advance they can.
Kevin Carr, PruProtect
It is important to check what existing benefits Beverly may have in place, either through her employer or individually. Depending on the budget available, as a single parent with two dependent children, covers such as IP, serious illness and life cover are all potentially important requirements.
As an architect it is likely that Beverly will be drawing and using computers so nerve damage to her arm could have consequences when it comes to underwriting. PruProtect would request a GP report before confirming the terms of the cover available, however, if she returned to work soon after the accident the most likely outcome is that any disability directly related to her right arm would be excluded, with other covers accepted as normal. The alcohol consumption is not excessive.
As Beverly takes regular exercise she could reduce the cost of her gym membership under the Vitality system as well as her future premiums across the product range. Policyholders engaging with PruProtect's Vitality programme will be able to reduce their premiums and have these ‘locked in' with no potential for future price increases.
As an example, £150,000 serious illness cover including life cover over 15 years would cost £59.72 a month. Cover that automatically reinstates itself after a claim without further underwriting or exclusions can be added for an additional premium under the minimum protected account option.
