personal insurance policies

Insurance is simply a way of protecting yourself against potential future events. Although there are many types of insurance policy available to cover almost any possible eventuality, the most common are general, life and term.

General insurance covers the range of specific insurances such as car, household or travel insurance. Term insurance is simply an insurance policy that will pay out a lump sum if you die within the set term. Life insurance is slightly more complicated and offers coverage in the event of sickness, death and other events.

Who Needs Personal Insurance?

Personal insurance is something that varies significantly from individual to individual. For example, there is little point in having travel insurance if you do not travel! Insurance that is based on death or incapacity will normally only become an issue when an individual has substantial outgoings such as a mortgage or dependants, typically young children.

What Types of Policy Are Available?

With general policies such as motor policies it really pays to shop around. Consider what type of cover you require, bearing in mind that in the UK it is a legal requirement to have third party insurance. However, you may also want to increase your premiums to cover repair, theft or replacement. Sites such as confused.com offer useful insurance comparison searches.

With term insurance, it is important to remember that you will receive no cash if you do not die within the term period. Whilst many people view term insurance as a cheap form of life insurance, it is not as comprehensive and its limitations should be recognised. Term insurance is perfect if you want to ensure that you are financially covered for a set period such as the repayment term of your mortgage, or until your children become independent.

Life insurance varies dramatically, from company to company. Many policies will pay out if you die but also if you don’t, so these types of insurance policies include a savings element within them. But do bear in mind that the premiums will be higher and you may not get as good return as you would from an alternative investment. One of the real benefits of life insurance is that you will often receive cash if you become terminally ill, not just on death.

Your personal insurance needs are likely to change, over the years, so take your time to assess what you hope to achieve and make sure that you keep your portfolio up to date.

Personal Insurance Policies