Insurance
Insurance is a product designed to protect you against financial loss in the event that something unexpected happens. It is common place for people to ensure items and belongings that are of a high value, either in terms of their financial or sentimental importance to a person.
Common insurance products include life insurance, income protection insurance, pet insurance, car insurance, phone insurance and travel insurance. While some insurance products are designed to be priced depending on the insured’s personal circumstances, others are based solely on the actual item being insured.
Do you need insurance?
This depends greatly on your personal circumstances in some cases, and in others on certain rules and regulations. For example, it is illegal to drive a car on a public road without the correct insurance in place to cover the driver. On the other hand it is simply advisable that when you go on an international holiday, you purchase the correct travel insurance to cover you against injury or sickness while you are abroad.
One thing you always need to consider when purchasing insurance is whether or not it provides you with what you really need from it. There is no point purchasing insurance cover that either doesn’t provide you with a high enough level of cover, and is therefore virtually useless, or provides you with too much cover, and means you are overpaying for a service you are you are not likely to need.
How do you pay for insurance?
This, again, depends mostly on the policy holder. Some insurance policies will offer the chance to pay for a policy for a certain period, either in a lump sum, or in monthly instalments. Paying for the policy in a lump sum usually works out cheaper, as interest is added to premiums which are not paid up front. For insurance policies that don’t offer the chance to pay a one-off fee, there will not be interest added to instalments.
It is important to consider also that financial insurance plans, such as life insurance and income protection which allow you to choose your level of cover, will have fees that reflect the cover you have chosen. For example, a person who asks for £3000 per month in income protection will be paying higher monthly instalments than someone who asks for £2000.
Different insurance policies will also vary in their reaction to missed payments. It is necessary to look at the terms and conditions in order to avoid costly charges if you default on a payment, or have accidently ordered a product that does not provide you with the correct amount of cover.
Paying an excess on an insurance policy is also a good way to bring your premiums down. An excess is an amount that, in the event of a claim, you will have to pay to your provider. This means that there is risk involved (you could end up paying more than you have saved in cheaper premiums in the event of a claim), but if you keep your excess to a sensible amount, there is a trade-off which should mean whatever happens you don’t lose out badly.
Share this..
Related stories
AIG refuses to back down in bonus row with US government
Fallen insurance giant AIG, which was forced to beg US authorities for $170 billion to survive, has refused to hand over details of employees who received $165 million in bonuses from the financial products division - the operation which many see as the main culprit for the collapse in the US economy. It seems as though Gordon Brown is not the only government leader who has fallen foul of banking...
Read MoreTracing that old insurance policy could prove worthwhile
It is no secret that hundreds of millions of pounds of unclaimed insurance policies are locked away in the vaults of many insurance companies in the UK. These are policies which have yet to be claimed with the underlying customers having lost contact, moved away or possibly died. When you consider the figures involved it is no surprise that locating old insurance policies has become something of a...
Read MoreIs your garden insured for the increased risk of theft?
As crazy as it may sound there has been a significant increase in garden thefts since the recession hit home and many homeowners are finding they are severely under-insured. We are talking about thieves breaking into sheds and stealing expensive equipment as well as thieves stealing expensive shrubs, plants and even freshly laid lawns. So are you fully covered?
The vast majority of...
Check your insurance, Brits driving to Ireland are advised
Despite the travellers from the UK are able to drive freely in the Republic of Ireland using a British driving license, those heading across the Irish Sea with their cars should check the content of their motor insurance policies before travelling, one provider has advised.AA Ireland spokesman Thomas Brosnan has reminded motorists to check the extent of their cover before heading to the country.Wh...
Read MoreEU Gender Directive: will Women pay more?
From 21 December 2012 insurers will no longer be able to use gender as a contributing factor when calculating insurance premiums. Typically, women have had access to cheaper premiums for policies such as life and car insurance, because they are considered to be lower risk. However a ruling from the European Union recently has banned insurers from using gender as a factor when calculating premiu...
Read More