Peter Hamilton, Friends Provident

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As a self-employed professional, he will probably have a number of clients and will not be paid for ...

As a self-employed professional, he will probably have a number of clients and will not be paid for work uncompleted when incapacity strikes. He should therefore have in place some locum/ professional expenses cover to bring in a fellow professional to complete any such contracts and ensure payment for them.

Covering the mortgage with IP should be the minimum as the £6,000 a year cost would be hard to meet in the event of long-term incapacity, even with a combination of his savings and Incapacity Benefit. Using his savings would quickly exhaust his 'rainy day' money ' he should look at a deferred period of no more than three months

However, covering the mortgage will mean mere survival with no other source of income. Mark should consider full IP. He could arrange cover for between £15,000 and £19,000, which would be paid tax-free. The exact level depends on what level of replacement income he feels he needs and whether he wanted to cover the risk of not passing the personal capability test for State Incapacity Benefit.

He should look to protect future increases in earnings.Assuming a cease age 60, deferred period of 13 weeks and automatic 5% annual increases in premium and cover, Friends Provident's monthly premiums would be £42.30 for an annual benefit of £15,600 and £50.82 for £18.980.



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