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Michael and Mandy

Michael and Mandy are 46 and 43 respectively, and own a business in Worthing. They were in the process of buying the business from the previous owner via a regular monthly payment. Jeff, the outgoing business owner suffered a heart attack. This was the main reason Jeff decided to retire early. He subsequently suffered further health complications and sadly passed away. Jeff was 58 years old.

The death of Jeff has made Michael and Mandy re-evaluate things. They came in for a review as they felt they needed to make sure they had protection in place in the event of either of their deaths.

Their Objectives

They currently have no life cover in place. In the event of their deaths they would like a lump sum to pay for the outstanding debts on the business and an additional lump sum for the surviving person.

Our Recommendations

After speaking to their accountant, Michael wanted to take out a Relevant Life policy which would pay out a lump sum on death or a smaller lump sum on diagnosis of a critical illness. The Relevant Life policy premiums can be paid by the business as a business expense, and in the event of Michael’s death the lump sum will be paid into a Trust with Mandy as the main beneficiary. The advantage of a Trust is that the Sum Assured can be directed to a specific person, or persons. In addition, the Sum Assured will be paid out immediately – rather than having to wait for Grant of Probate to be issued.

For Mandy we recommended a similar policy which would pay out a smaller lump sum in the event of her death.

Please note the above case study is based on a real client seen by our advisers, however all names have been changed for confidentiality. This case study forms a summary of advice and before taking out such products we recommend taking independent financial advice as everyone’s situations are different.

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