Michael, 37, and his wife Rachel, 33, have been having marital problems and have now separated. Neither can afford to stay in their house, which they bought with a joint repayment mortgage of £280,000 over a 25-year term, so they have to sell it. They hope the sell will give them enough money to buy two small flats fairly close to each other so they can both continue to look after their twin daughters, aged four. Michael, a civil engineer, earns £50,000 a year, while Rachel earns £42,000 working as a junior doctor. They are all healthy and currently have joint decreasing life cover for the mortgage only. What do they need to consider in terms of protection?
Alan Lakey, Highclere Financial ServicesWhether they divorce or not, now is the time to take stock of their financial situation. They need to consider the overall impact on their finances should either of them die or be long-term sick. As a doctor, Rachel will be only too aware of the problems associated with long-term sickness or critical illness and she and Michael need to assess what benefits, if any, they receive when long-term sick and also in respect of ill-health early retirement. If Rachel is a practicing GP she is likely to have a locum agreement in place and this can be funded b...
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