Insurance is required to get finance

Any proposed loan may well have to be secured by life assurance on all the borrowers for the amount and period of the advance. Today the methods used to repay the loan are wide and varied and include conventional 'capital and interest' (known as 'repayment mortgage') and a number of interest only options supported by various alternative means of capital repayment at the end of the period of borrowing. Each method has its plus and minus features, but it is of course vitally important that you obtain genuine impartial independent financial advice to ensure that the method you choose is the right one for you. We can make the appropriate introductions in this regard.

The property you purchase will also need to be insured against loss or damage by fire and this relates to both the structure itself as well as the contents (stock, fixtures and fittings, etc.). These can often be incorporated in one package policy specifically tailored to suit the trade involved (e.g. a shopkeeper's package, a hotelier's policy, etc.).

There are other insurances that are either essential or strongly recommended and these include motor insurance (which, whilst outside the involvement of the lending institution, is an absolute necessity to conform with the law), personal contents insurance (e.g. possessions such as clothing, furniture, etc.), and pension contracts (these provide very advantageous tax benefits to you as well as giving excellent income on retirement). Increasingly there is a demand for critical illness cover and personal health insurance (PHI) by both borrowers and lenders.

We are more than happy to organise introductions and quotations for any of these insurance through the contacts we have in this sector.

As far as these insurances are concerned, we are conscious that you may not be aware, as yet, of the precise levels of cover required on, for example, stock, but you should at this stage let us have your best estimates so that we can get comparative quotations to hand, and then these estimates can be more accurately adjusted either just prior to or just after take-over of the business. In addition, you do have the option to change your 'sums insured' at any time during the course of the trading year.

Whilst we would emphasize that we act merely as an introducer as far as life assurance and pension planning are concerned, there are, nonetheless, issues that need your attention. It is important that you let us know at the outset whether there are any medical conditions that are likely to affect the risk and/or choice of Life Assurance Company. We would also like to know from the outset whether you are a smoker or a non-smoker, as this can have a considerable effect on the premiums payable.

Effective pension planning is essential if you are to enjoy a similar standard of living during retirement as you enjoyed whilst working. We are well placed to introduce you to expert advice for the self-employed. Pension planning should be approached as soon as practicable, and whilst it may be useful to first have some experience in your new business to determine your ability to make a sensible, regular contribution delays in starting a scheme can be costly. Previous pension rights can also be transferred into a new scheme to further enhance benefits if this is considered appropriate.