Protection - What you need to know about insurance
Protecting your persona, your family, and your assets are crucial, especially if you have a family or running a business. Below are the types of insurance policies and covers you might need to think about investing on.
Life Insurance
What Is Life Insurance?
A life insurance policy is a coverage type you agree with an insurance company. You will need to pay a premium, and the company will provide your family or beneficiaries with a sum in the case of your death – known as a death benefit.
What Are the Different Types of Life Insurance Available?
Term assurance
This is one of the most basic types of life insurance and is called term life insurance, where you choose the period you want to cover and the amount you want to be insured for. If you pass away within the term, the policy pays your beneficiaries. If not, the policy does not pay out, nor are the premiums returned. There are three types of term assurance: level-term, decreasing-term and increasing-term insurance.- Level term: pays out a lump sum if you die within the specified term. The amount you're covered for remains at the same level throughout the term of the policy.
- Decreasing term: the amount you're covered for decreases over the term of the policy. These policies are beneficial to cover debt that reduces over time, such as a repayment mortgage.
- Increasing term: the amount you're covered for increases over the term of the policy, to keep up with the cost of inflation. This is often used to protect loans which don’t decrease like a standard repayment mortgage e.g. shared ownership.
Family income benefit policies
Family income benefit insurance is a type of decreasing term policy. Rather than a lump sum it pays a regular monthly income to your beneficiaries if you pass away until the policy’s expiry date.Whole of life policies
Whole of life policies are ongoing policies that pay out when you die, whenever that is. Unfortunately it is one of the guaranteed things in life that at some point you will die (and therefore the policy will have to pay out), these policies are more expensive than term assurance policies, which only pay out if you die within a certain timeframe.Do I Need Life Insurance?
Life insurance is an essential policy to consider, especially if some members of your family, such as a partner or kids, depending on your income. In this way, they will be protected in the case of your death.
How Much Does Life Insurance Cost?
Depending on your health, age, job, and risks you usually run, your life insurance can vary. The average monthly premium for a life insurance policy in the UK is £15.85.
What Are the Determining Factors?
Insurers consider several factors when calculating your life insurance monthly cost. These factors include:
- Age
- Lifestyle
- Medical history and health
- Living situation
- Gender
- Job and career
What Do You Need to Think Before You Take Out Life Insurance?
Before contacting an insurer, it is essential to determine how much coverage you and your family need. You should also consider your current situation and check whether you can afford the monthly payment.
Critical Illness
What Is a Critical Illness Cover?
Critical illness insurance cover, also known as critical illness insurance, is a contract you make with your insurer. In exchange for payments, the insurer will pay out a lump sum to your family or beneficiary in case of your severe or critical illness.
What Does Critical Illness Insurance Not Cover?
The critical illness cover is designed to cover a limited range of critical illnesses, which are specified on your insurance plan. While the cost of this insurance is affordable not all critical diseases are effectively covered, so be sure to check your policy information carefully.
Do I Need Critical Illness Insurance?
If your family primarily relies on your income, you might need to consider investing in a critical illness insurance plan. This will cover you all in the case of illness and reimburse your family. However, it is recommendable to check whether life or health insurance could be a more convenient option.
If your family primarily relies on your income, you might need to consider investing in a critical illness insurance plan. This will cover you all in the case of illness and reimburse your family. However, it is recommendable to check whether life or health insurance could be a more convenient option.
What Are The Most Common Critical Illnesses?
- Acquired brain injury
- Aortic surgery
- Aplastic anaemia
- Benign brain tumour
- Bacterial meningitis
- Blindness
- Cancer
- Coma
- Coronary artery bypass surgery
- Deafness
- Dementia, including Alzheimer’s disease
- Heart attack
- Heart valve replacement or repair
14. Kidney failure
15.Loss of independent existence (LOIE)
16. Loss of limbs
17. Loss of speech
18. Major organ transplant
19. Major organ failure on a waiting list
20. Motor neuron disease
21. Multiple sclerosis
22. Occupational HIV infection
23. Paralysis
24. Parkinson’s disease and specified atypical parkinsonian disorders
25. Severe burns
26. Strokes
Cover for critical illnesses and conditions can vary per insurance provider and some of these may not be covered by some providers.
How Much Does Critical Illness Insurance Cost?
The cost of your critical injury insurance policy will vary and can be adjusted depending on what your goals and needs are. However, generally, the monthly payment varies depending on the sum assured length of the policy, premium types, and type of cover.
What Do You Need to Think About Before You Take Out Critical Illness Insurance?
Critical illness insurance is an important cover to have if your family relies on your income. However, it will not cover several other illnesses and health conditions that can still impact your ability to work and earn. Making clear with your insurer what are the situations covered and what is not is crucial.
Income Protection
What Is an Income Protection Insurance Cover?
The income protection cover is a policy designed to replace part of your income if you are ill, disable, or unable to work. The cover will pay out regularly until you can start to work again or you can retire. It will also stop in the case of your death or end of the policy.
After you have started the insurance policy, there is a waiting period you have to allow for before the payments can start. You can set the waiting period to end at the end of your sick pay or other insurance policy. However, the longer the waiting period is, the lower your monthly premium will be.
Do I Need Income Protection Insurance?
Income protection insurance covers the majority of illnesses that will prevent you from working. So, both long-term and short-term health conditions fall under the insurance, and you can claim as many times as you need. These features make it perfect to be able to count on a form of income for your family – in case you can’t work and provide for them.
How Much Does Income Protection Insurance Cost?
The average income protection insurance monthly payments in the UK are £18.35 – which will guarantee a monthly payout of 65% of the income you would perceive normally.
What Do You Need to Think About Before You Take Out Critical Illness Insurance?
The monthly payments might vary depending on your health conditions, health, and lifestyle. Moreover, since it will start covering you after your sick pay and other policies have ended, it might only be efficient if you are affected by a long-lasting health condition. Ultimately, considering the other covers you have might be essential.
Buildings and Contents
What Is Home Insurance?
Home and homeowners insurance is a policy that is designed to cover the losses and damages that might affect the property’s value. It covers furnishings and the majority of other assets in your home. Also, it covers accidents that happened in the property.
What Is Covered by Home and Contents Insurance?
Depending on your policy, the insurance will cover the losses caused by damages to your property or residence. It also protects the items inside the house and the ones that have been taken out of it – on holiday, for example. This insurance plan can also cover accidents that happen in the house.
Do I Need Home and Contents Insurance?
A home or another property is one of the most significant investments for anybody. Investing in a home and contents insurance can be the only way to ensure everything is safe at all times. Building insurance as a minimum is a mandatory requirement for a mortgage.
Do How Much Does Home and Contents Insurance Cost?
On average, in the UK, homeowners pay £161.75 a year. This results in an average price of just £3.11 a week to protect your home!
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