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Insuring You and Your Home
It is your responsibility to ensure that all necessary forms of insurance relating to you and your home are in place.
As well as Buildings and Contents it is advisable to insure against events that could affect your ability to meet your mortgage payments. It is important to consider insurance cover such as Mortgage Protection Plans. These cover loss of income due to accident, sickness and unemployment. They can usually be covered collectively or individually and are also known as ASU (Accident, Sickness and Unemployment) Policies.
You should also consider the consequences of premature death and critical illness on you and your family’s ability to meet the Mortgage and other financial commitments.
Why do I need it?
Insurance pays out when an unpredictable event causes a loss. You need insurance whenever:-
- The Law says you must have it – for example if you drive a car, you must be insured;
- An event could happen to you and you would not be able to afford the loss – for example if a tile fell from your house and insured someone who then claims thousands of pounds for their lost earnings;
- If an event happened and people who are dependent on you could not bear the loss – for example, if you died and your children needed the financial support you have previously given.
In some cases the state provides insurance by, for example, paying incapacity benefit if you cannot work due to illness or bereavement benefits to a widowed husband or wife. However, State Benefits are low and you usually have to pass a number of tests before qualifying for them.
Often a scheme at work provides life insurance – check the cover is enough for your needs. A scheme at work might also provide some health insurance such as income protection insurance or private medical insurance.
What Types of Insurance are there?
You can protect yourself against unpredictable risks by taking out insurance. There is almost no limit to the risks that you can insure against, but the most common types of insurance are listed below:-
- GENERAL INSURANCE
(For example car insurance, home insurance, travel insurance, private medical insurance, accident insurance and sickness insurance). - LIFE INSURANCE
(For example whole of life insurance, with profit bonds, unit linked bonds, income and growth bonds, endowment policies, maximum investment plans or any other life insurance, which builds up a cash-in value). - TERM ASSURANCE
(For example lump sum term insurance including mortgage protection policies and family income benefit).
