Finance

Five types of insurance policies every individual must have

Insurance policies are one of the most valuable products that everyone, irrespective of the age or lifestyle must have in order to recover from varied financial breakdowns.

Below are the top five insurance policies that you must consider

Life insurance

Life insurance is a lifeguard that aids your family with financial support when you are not around to take care of them. It helps your family either with a lump sum or periodic money which you can decide depending on your family’s economic standing. It is a must when your family primarily depends on you for the income, even if your family has other sources of income; life insurance could really help them with their financial situation.

The two main types of life insurances are; Term life insurance and whole life insurance. Term life insurance has fixed periods, and your family gets paid if you pass away before the policy expires. In term insurance, there is no lump sum payout, but your family gets paid on a monthly basis for the period that you chose. Whole Life Policy on the other hand, will aid your family irrespective of the time of your passing. With whole life insurance, you can choose the way you want your family to receive the money; that could be either in bulk or periodic payments. It makes sure that your dependents are taken care of with the money when you are not around to do so. The amount that your family gets paid depends on the insurance cover that you buy.

So, before buying the life insurance you can check the type of income your family needs: to pay for education, to cover loans/mortgages, to pay rent, or some other specific payments that either needs money on a regular basis or in a lump sum.

The cost of life insurance depends on many factors like age, health condition, life habits, environment, policy time period, and the amount that you want your family to receive. And life insurance will only pay after you expire and it doesn’t aid if you are unable to work or make money because of illness or any other issue. However, some of the policies do provide support in times of critical illness or permanent disability.

Income Protection Insurance

Regardless of great talent or skills, millions around the globe are unable to work or have a decent income due to illness. In such situations, income protection insurance comes in really handy to cover the bills over a period of time.

Income protection insurance or permanent health insurance is a long-term policy which supports you with regular income if you are unable to make money because of an injury or illness. It also pays you if you are unable to work for a shorter period of time and helps you until you can get back to work. You can claim this insurance as many times as you get sick during the time period of the policy.

Even if you don’t have any dependents, having an income protection insurance is very important as it helps to keep you afloat with money when you are unable to make it.

Critical Illness insurance policy

Critical Illness insurance policy offers protection when the insured suffers serious illness or injury. If you are ever diagnosed with a critical illness in the time-frame of the policy, you will receive tax-free lump sum money. The policy is available for both children and adults. The money you receive from this policy can be used for whatever purpose; either to stabilise the family’s financial ground or to pay for medical costs.

Critical illness policy is one of the most important yet widely ignored policy. Everyone must know that it not only covers the medical bills but also helps a person in playing his or her part of the income to the family when he or she is unable to work because of an illness or an injury.

It is also a tax-free lump sum money which you can use for the purpose of your own will giving you more options to think for the greater good of yourself and your family.

Home insurance policy

Home insurance is the way out to make up for any loss incurred to your home or contents in it. Some insurers provide insurance for both the building and the contents in it and there are some who only insure for either one of them.

Building insurances insure you for any damage that your home suffers from walls, floorings, fixtures both inside and outside of your home within the premises. On the other hand, content insurance insures you for items in your home including furniture, electrical goods or any other significant items that are either stolen or damaged.

Vehicle insurance

Driving a car without a license in the UK is a crime, as is driving without insurance. If caught without adequate vehicle insurance, you could end up paying thousands of pounds in fines, or arrest or seizure of both vehicle and licence or a combination of these depending on the gravity of the situation.

So, it is better to have an insurance which comes at a pretty low price compared to all the fines or even the cost of losing your car. Depending on the insurance policy, you cover any damages that you have caused or someone has caused to you.

Third party; third party, fire & theft; and comprehensive cover are the three most common and important vehicle insurances. The third party covers the costs of any damage that you have caused to other person or their property and it won’t cover any damages that you have incurred during the same. Third party, fire & theft cover third party costs, plus any damage that is caused to your vehicle from either fire or theft. Comprehensive cover is the most useful of all which covers all the costs of your vehicle and the opponents.

 

Here, the insurance providers look into various aspects like your age, the condition of the car, driving history, your locality, and various other factors related to your car. In any such cases, you will not have to pay for the entire damage from your pocket. Here, depending on the policy that you subscribe to and the level of damage, the insurer can help you in covering most of the money spent.

Situations in life are often the most unpredictable. Even with careful planning and a healthy lifestyle; one can never guarantee that they can escape the hard blows of unexpected disasters. In such cases, although insurance may not be able to help you come back from that blow completely; it can at least provide a better ground to recover for both yourself and your family.

Always make sure to take the advice of a professional before signing up for any insurance as they know how to get the most out of any insurance policy. Professional advisors will also help you find the best insurance deals depending on your income, health, family status, and also help you in figuring out deals which could help your family as a whole. Plus, there are a lot of scammers in the world of insurance, and professional advisors filter them out and help you with the most legitimate insurers.

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