| About Us |
| Financial |
| Mortgages |
| Personal |
| Travel |
| Commercial |
| Cricket |
| Terms & Conditions |
| Contact Us |
Tel: |
|
INDEPENDENT FINANCIAL ADVISERS Meadon
Life Ltd. based in Market Drayton, Shropshire, are a local firm
of Independent Financial Advisers. For over 20 years we have
been giving advice to both personal and corporate clients. We
are truly independent financial advisers and can advise on nearly
all companies and products from Mortgages, Life Cover, Critical
Illness Cover, Pensions and Retirement Planning , Investments,
Savings, Long Term Care, to Taxation and Inheritance Tax Planning.
Mortgages Meadon Life Ltd. has access to the whole range of Mortgages on the market, whereas banks and building societies can only offer their own mortgage products to borrowers. Meadon Life Ltd are regulated as intermediaries by the Code of Mortgage Lending practice as defined by the Mortgage Code Compliance Board. Under the code, there are three levels of service. We can provide advice and a recommendation on a suitable mortgage product based on your individual requirements. Using up to date technology we can help you to source the most suitable mortgage scheme to meet your requirements. There are over 4,500 mortgages from which to choose, with many not available on the High Street. The mortgage market is very competitive and there are many different interest rates, and options available. We can help you choose the best type of scheme to suit you. A brief summary of some of the most popular schemes is listed below: Variable Rate Mortgages The variable rate mortgage is traditionally the most common type of scheme. The level of repayments will vary as the interest rate rises or falls, thus making the repayments somewhat unpredictable. Fixed Rate Mortgages With a fixed rate mortgage you have the advantage of knowing that your repayments will not alter in respect of interest rate fluctuations, thus allowing an element of budgeting. This could represent a cheap option if rates rise, but if they should fall, you could be paying more than the prevailing rate. At the end of the fixed rate period, your loan will switch back to the Variable Rate. Capped Rate Mortgages A capped rate mortgage gives the same protection as a fixed rate, but has the added advantage that if interest rates fall, the amount you pay will also go down. If rates increase, the amount you pay will not go above the chosen level. After the initial capped period, the interest rate will revert to the Variable Rate. Discount Rate Mortgages The initial interest rate charged is reduced (discounted) from this standard variable rate for a set period of time. If interests fluctuate you will always pay this reduced rate until the discount term is over. Once the rate has ended, you will revert back to the Standard Variable Rate. Cash Back Mortgages These schemes are on the Variable Rate, but the lender gives the borrower a percentage of the loan back (typically 3-5%) on completion. Purchasing a property and raising a Mortgage can be one of the most stressful and time consuming transactions you will ever make. Just think, as well as choosing the right mortgage, there are also estate agents and Solicitors, Bank and Building Society to deal with. Why not let MEADON LIFE LTD. do this for you and liaise with all concerned parties, thus leaving you free to relax, plan, and enjoy the other aspects of moving.
Life Assurance There are two basic types of life assurance, and these take a myriad of differing forms. Meadon Life Ltd can help you select the correct policy to suit your needs based upon costs, charges, performance and levels of cover, whether it is for personal or business protection Term Assurance is the most basic form of life assurance. Term assurance provides life cover only during a specific period. There are a number of different types of term assurance and these are dealt with below. Level Term Assurance The simplest form of term assurance is level term assurance. This contract provides that the life office will only pay out the sum assured if the life assured dies during the term of the policy i.e. before the expiry date. The sum does not vary during the term of the policy and once it has expired the policy has no value. This is the cheapest form of life assurance, since the cover is only temporary and there is normally no surrender value or cash-in value available on early termination ( see section D ). If a premium is unpaid, the policy will lapse upon the expiry of the days of grace. Renewable Term Assurance Some term assurances are 'renewable' in that on the expiry date there is an option to take out a further term assurance at ordinary rates without further evidence of health as long as the expiry date is not beyond, say, age 65. Each subsequent policy will have the same option. Thus, instead of purchasing a 20-year term assurance, a 46-year-old man might effect a five-year term assurance which gives him the option of renewing every five years. Whenever the policy comes up for renewal the premium will increase, since it is based on the then age of the life assured at renewal. Renewable policies are becoming more difficult to obtain due to the AIDS risk. Convertible Term Assurance This is a level term assurance with an option which enables the assured to convert it, at any time during its existence, to a whole life or endowment assurance without further evidence of health. The premium for the new policy will be that normally applicable to a whole life or endowment assurance policy for a person of the life assured's age, at the time of conversion. If the original policy was issued with some form of extra premium, then the premium for the new policy will be similarly treated. Often, part-conversion is allowed as well as total conversion. If only part of the policy is converted, the sum assured on the first policy will be the original amount of the sum assured on the new policy. The premiums charged for convertible term assurance will be slightly higher than for ordinary level term assurance, to allow for the 'cost' of the conversion option. Decreasing Term Assurance Term assurance of this type has a sum assured which reduces each year ( or possibly each month ) by a stated amount decreasing to nil at the end of the term. Decreasing term assurance is normally used to cover a reducing debt, such as the capital outstanding on a house purchase mortgage, with the sum assured being linked to the reduction in the capital outstanding under the loan. Although the cover decreases each year, the premium remains constant. Premiums are sometimes payable for a shorter period than the policy term itself, because otherwise there would be a temptation for the assured to lapse the policy in the last year or two, when the sum assured had reduced to a comparatively low level. Therefore, for a 25-year policy, some insurers would impose a premium-paying period of 20 years. Premiums for decreasing term assurance are either slightly cheaper than for a level term assurance for the same initial sum assured and term, or the same, but payable for a shorter period. Increasing Term Assurance Because of inflation, a term assurance with a level sum assured gives a reducing amount of real cover as the value of money declines year by year and, consequently, attempts have been made to combat this by introducing term assurance policies with some form of escalating sum assured. Some insurers offer policies where the sum assured can be increased each year by a set percentage (often 10%) of the original sum assured. Other offices have short-term policies which can be renewed at the end of the term, for a higher amount; for example, the holder of a five-year level term assurance may have the right at the end of the five years to effect a new policy for a sum assured of up to 50% more than the original. Whenever the sum assured is increased, the premium is correspondingly raised. In addition, because the insurer is giving the right to increase the cover substantially without any medical evidence, the initial premiums for these increasable contracts are higher than those for ordinary assurances for comparable sums assured. Furthermore, short-term policies with renewal options usually provide for the premium to be based on the life assured's age at the renewal. Many of these policies incorporate conversion options. Cover can usually continue up to the age of 60 or 65. Expanding policies are becoming more difficult and expensive to obtain due to the risk of AIDS. The ideal type of increasing policy would be an index linked one, where the sum assured can be increased each year by the increase in the Retail Prices Index ( RPI ). These policies used to be available but due to the problems of AIDS have been withdrawn. Any existing index policies can still be increased according to the policy conditions. Family Income Policies Family income benefit assurance is available in a variety of forms. It can be added to endowment or whole life assurance or stand on its own. The benefit offered is for payment to the life assured's dependants of an agreed income until the expiry date of cover. Thus, if the life assured dies at the beginning of the indemnity period, payment will be for the whole period. If death is in the last year the benefit will be just one year's payment. It is, in fact, a type of decreasing term assurance where the benefit is payable over a period rather than as a lump sum.
In selecting the terms of years, due regard must be paid to the age of the life and the need. For example, a newly married couple planning to have a family early could effect a family income assurance for 20 years. This would amply cover the period during which the children were growing up and thus the wife's period of greatest need for insurance protection. The same reasoning applies in the other direction of course, the need to insure a wife's life is just as strong. Many insurers have upper age limits for expiry of family benefit policies. Obviously at higher ages the premium could be expensive. From an underwriting point of view, this type of insurance requires careful underwriting as the insurers are committed to a high risk in the early days. In the example quoted above the maximum liability was £100,000. The income available needs constant examination in the light of changing needs and inflation: topping up with additional policies may be necessary. Increasing Family Income Policies A number of providers market family income policies where the income benefit increases automatically at a pre-arranged rate, during the term of the policy. The income benefit might increase each year by 3%, 5% or 10%. In some cases, the increases will stop if a claim arises whilst in some cases they may continue throughout the claim-paying period. The latter type will be more expensive, but will be a better protection against inflation. Premiums will usually be level, even though the cover increases. These policies are generally written to normal retirement date to protect wives, or to the expected completion of full-time education in the case of children.
What is Whole Life Assurance The whole life policy is a very simple policy which pays out a sum assured whenever the life assured dies. It is a permanent policy not limited to an expiry date. Because a claim will be certain, premiums will be more expensive than a term assurance where a claim is merely possible or, at worst, probable. Whole life policies are substantive policies and can often be used as security for a loan either from the insurer or another lender. In addition, these contracts develop a monetary value in the event of discontinuance of premium payment. This can take two forms. The first is the surrender value. It will be very little in the early years ( nothing at all, probably, for the first two or three years ) but will increase substantially as the policy reaches the likely date of payment. The second option is known as the paid-up policy. No cash is refunded, but the policy remains in force at a lesser sum assured based on premiums paid to date. The cost of, and the returns from these contracts can vary dramatically, the advice available directly from a single product insurer is limited to its own product range which may not offer the best return. It is therefore important to seek advice from independent professionals such as those available on this site who will be able to search for the best rates available from a selection of companies and contracts. Non-profit Whole Life Policies A non-profit whole life policy has a level premium, payable throughout life. It pays only a fixed sum assured, whenever death occurs. In practice, most policies offer a cessation of premiums on attainment of a certain age. With-profit Whole Life Policies These policies differ from non-profit whole life assurances only in that the amount payable on death is the sum assured, plus whatever profits have been allocated up to the date of death. Again, premiums can be payable throughout life, although they normally cease at a certain age. Low-cost Whole Life Policies These policies are with-profit whole life contracts with a guaranteed level of cover. They are actually written with two sums assured. The amount payable on death is the greater of either the basic sum assured plus bonuses or the guaranteed death benefit. Bonuses are calculated on the basic sum assured and this amount increases year by year with the addition of bonuses until the guaranteed death benefit is overtaken. Consequently, the contract is, in effect, a with-profit whole life policy incorporating a life assurance element which decreases as the bonuses increase. Premiums for this type of contract are lower than for ordinary non-profit whole life contracts although the benefits will not be as high as those of a full with-profit policy. Some providers allow the difference between the basic and guaranteed death sums assured to be converted into basic sums assured, subject to the appropriate increase in premium. Single Premium unit-linked Life Policies These contracts (often called bonds ) are the simplest form of unit-linked policy. They are normally written as whole life contracts, so that the investor can continue the contract as long as he likes. When the policy is effected, the whole of the single premium is applied to purchase units in the selected fund at the offer price ruling on the day of payment. The policy can then be cashed in at any time, the surrender value will be the total value of the units at the bid price on the day of surrender. If the life assured dies, the death claim value will be paid out. There is a trend of providing life cover of more than the value of the units, so as to reduce costs and make it easier for older lives to invest by avoiding underwriting, though this varies between insurers. Many contracts allow the investor to pay in further single premiums at any time. This topping-up facility is useful, since it eliminates the necessity of taking out a completely new policy. Most insurers offer both single life and joint life second death versions of this contract. Almost all of these policies allow the investor to take an income by making partial withdrawals each year. These withdrawals are achieved by cashing in however many units are needed to give the withdrawal amount. If the annual amount withdrawn does not exceed 5% of the original investment, the policy holder will pay no income tax at that time. There may be some liability to higher rate income tax if the withdrawal rate exceeds 5% or its duration exceeds 20 years. Regular Premium unit-linked Life Policies The main advantage regular premium unit linked whole life policies have is their flexibility, since they offer a variable mix between investment content and life cover. The policies are regular premium contracts, where the initial level of life cover is set for the first ten years on the basis of an assumed growth rate in the fund to which the contract is linked. At the end of this ten years, the policy is reviewed to see how the actual growth rate compares with the assumed growth rate. This determines whether the value of the units allocated at the time will be enough to maintain the sum assured. The action taken as a result of this review varies from insurer to insurer but usually, the sum assured is increased, and if it is lower, either the sum assured is reduced or the premium is correspondingly increased. Further regular reviews are made, usually every five years, but possibly more frequently once the life assured reaches a higher age bracket. The level of life cover under these plans is higher than with a savings plan and, to help pay for this, unit allocation in the early years is very low and sometimes nil for the first two years. The investment element of the policy takes some time to build up. If the policy is cashed in, the surrender value will be the bid value of the units allocated. If the total unit value overtakes the sum assured, then the higher amount will be payable on a death claim. Some policies have a fixed relationship between the premium and the sum assured. However, most of them allow the policy holder to choose his own sum assured, within certain limits, for any given premium. The policy holder may then have the right to adjust his sum assured up or down ( again within certain limits ) according to their circumstances. Obviously, the more premium that goes into life cover, the less that is invested into units. The attraction of this type of plan is that the level of life cover is extremely flexible enabling a high degree of protection to be given in the early years and then reducing it to give higher levels of investment later in life, when protection for the family may no longer be the main aim. In order to maintain the qualifying status of the policy, the minimum sum assured is set no lower than the Inland Revenue minimum: 75% of premiums payable to age 75, some offices have higher limits. The maximum sum assured also varies from insurer to insurer, but is typically that which can be sustained throughout life based on a growth rate of 7.5%. Requests for an increased sum assured may be subject to fresh medical evidence unless the policy has a guaranteed insurability provision. The cost of the life cover is met by monthly cancellation of units. The amount cancelled is based on the difference between the sum assured and the value of units, and is calculated with reference to the latest mortality tables. Enough units are cancelled each month to pay for that month's life cover. The policyholder can thus benefit from future improvements in mortality statistics. A further advantage is that, as the value of the units builds up, the cost of the life cover can reduce rather than increase; as it would on a conventional policy. Once the value of the units overtakes the sum assured, deductions for life cover will cease. Some offices allow the policyholder to increase his sum assured regularly, in line with inflation, without medical evidence. This guaranteed insurability provision is valuable because it enables the policyholder to maintain the real value of the cover. However, some insurers cancel this option if it is not used every time it is available. the option may be available every year, every three years or every five years, depending on the insurer. Unit-linked Term Assurances Unit-linked term assurances are term assurances in the sense that the sum assured is only payable on death during the term of the policy. However, they work very much like the regular premium unit-linked whole life policies explained above. Each month's premium will buy units and each month enough units are cancelled to pay for that month's life risk. If the units perform exactly as per the growth rates assumed in the policy, the sum assured will be maintained for the term of the policy. There will be regular policy reviews to see how unit performance is going. If the units over perform there will be a cash value in the policy which the policyholder can take at the expiry of the term. If the units under-perform then the premiums would have to be increased or the sum assured reduced. Universal Life Policies Universal life policies are a development of regular premium unit-linked whole life policies but with a wide range of optional extras for total flexibility. The idea is that the policyholder pays in what he likes, when he likes and chooses from a whole range of benefits. All premiums paid are applied to purchase units in the selected fund(s) and each month the cost of whatever benefits apply is paid by cancelling the relevant number of units.
Benefits can often be added later as well as chosen at the outset. Most contracts provide for a regular premium, usually monthly, which can be increased or reduced as required, and also allow single premiums to be paid in whenever desired.
All classes of Personal & Commercial Insurances Established for over 40 years 11 Cheshire
Street, Market Drayton, Shropshire, TF9 1PD
Insurance & Mortgage Brokers 11 Cheshire Street, Market Drayton,
Shropshire TF9 1PD
|