How to keep your house safe
Even though it's not required by law, your mortgage company will want you to get building insurance to protect their investment. But it's also important to protect your own investments. Even if you've paid off your mortgage, you should still make sure you're financially secure.
Home contents insurance and personal possessions insurance
Money Observer says that the average home has GBP44,000 worth of things inside it. Most people wouldn't be able to replace all of this without insurance. A typical premium costs about GBP150 per year and covers up to GBP50,000. Most contents insurance policies also cover public liability and personal legal expenses, which most people don't use but could be very helpful if they were needed.
Personal property insurance is a good idea because it often covers your things both inside and outside of the house. It is often included in your contents insurance. All-risks insurance is another name for personal possessions insurance. It covers things that are lost or stolen outside of the home.
Help with money
Most insurers say that income payment protection insurance is the best way to make sure you can pay your mortgage and other monthly bills. Kevin Carr, a senior technical advisor at LifeSearch, thinks this is a better choice than payment protection alone, such as accident, sickness, and unemployment (ASU) and mortgage payment protection insurance (MPPI). Carr said in a recent statement that "The sales of payment protection bring in a lot of money for banks and mortgage lenders. For example, 17 percent of the profits of Lloyds TSB come from "m this."
You don't want your debts to come back to haunt you.
In addition to protecting your income to help with loan payments, you may also want to consider personal finance products like life assurance and critical illness insurance, which, in certain situations, can give you a lump sum that can be used to pay off the mortgage. Whether you choose life insurance or critical illness insurance will depend on things that are unique to you. For example, if you are single and don't have anyone who depends on you, having a lot of life insurance wouldn't help anyone. But if you get a serious illness, a lump sum might help you keep a good quality of life. Personal accident plans can be helpful if you think that the policy's conditions would apply to you. For example, insurance companies like Nationwide will pay up to GBP50,000 if you lose a limb, GBP10,000 if you lose a ship, and GBP2,500 if you lose a toe. This is for a monthly premium of GBP4.95.
Private health insurance/health insurance
There are a lot of different ways to pay for health insurance, and they change depending on where you are in life. As we've already talked about, some examples are critical illness insurance, long-term care insurance, and medical insurance, which can also be called private medical insurance or just "health insurance." Wikipedia says that health insurance is one of the most controversial types of insurance because of the heated debate between the needs of insurance companies to stay in business and the needs of their customers to take care of their own health.
"Adverse selection," which means that sick people are more likely to sign up for health insurance, is one of the biggest problems that insurance companies have to deal with. Health insurance companies say that people who want health insurance are often the ones who already have health problems, are more likely to have health problems in the future, and may engage in "risky behavior" like drinking too much or smoking. Products like health insurance tend to spark heated arguments about the morality of health insurance costs and the question of whether or not people who have health insurance are more likely to live "risky" lives because they know they are covered.
Travel insurance
Travel insurance isn't hard to understand, but there are a few things you should think about. Most travel insurance covers things like cancellation, lost luggage, and medical costs. But Money Observer says you'll get a better deal if you add baggage coverage to your personal property insurance instead of your travel insurance. The consumer financial magazine also says that you should extend your car insurance so that your car is covered when you drive abroad.
Moneynet, a personal finance consumer information site, says that you should shop around for travel insurance and avoid the high street travel agents. In their insurance guide, it says:
"Since January 2005, it's even more important to buy travel insurance from a company other than a travel agent. Since then, the insurance industry has been regulated by the Financial Services Authority, which can look into problems and take action on behalf of customers. Tour operators and travel agents, on the other hand, are not covered by this regulation. This means that if you have a problem with travel insurance you bought from a travel agent, the FSA and the Financial Ombudsman Service won't be able to help you."
In a recent press release, money net also criticized high street travel agents for charging too much for insurance. It said that "major high street players like Thomas Cook, Thomson, and Travelcare, which together make up about 70% of the travel insurance market, charge premiums that are usually twice as expensive as buying cover online."
Weddings: Make sure your money is covered for good times and bad.
Even though insurance isn't romantic, it's important because if your wedding doesn't go as planned, it can be very expensive. Most wedding insurance will pay to fix or replace a damaged dress, replace lost rings, or retake photos if something goes wrong with the photographer or prints.
Insurance doesn't always come with guarantees, but shopping around to make sure you, your partner, and your family have the best protection will give you some peace of mind.
