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Tag: insurance

How to insure against the winter blues

How to insure against the winter blues

Summer, such as it was, is now very definitely over and autumn is starting to make itself felt.  Depending on your point of view, we’re now either coming into the season of hot chocolate and hygge or coming into the season of cold, wet weather and general misery.  Even if you love the cooler months, the fact still remains that they do bring their own challenges, but the good news is that you can protect yourself against them by “self-insuring” (following good practices) and taking out formal insurance cover.

Insuring your health

Even though minor illnesses and injuries and frankly part and parcel of autumn and winter seasons, you don’t just have to cave into them.  Just being sensible about what you eat and drink can go a long way to boosting your immunity and if you make time for exercise as well, especially outdoor exercise, then you will put your body in a much better place to ward off the cold-weather nasties.

At the same time, however, you have to be realistic about what life can bring and about what you can do to be prepared for it.  With that in mind, it could be a good idea to take out dental insurance, if not full medical insurance.  Autumn rains and leaves and winter ice are all serious tripping hazards, which can easily leave you with damaged teeth – and dental bills can be very expensive.  Thanks to the NHS other forms of treatment are often much more reasonably priced, in fact, they may be free, but there may be a lengthy wait for them and the treatments on offer may not be as extensive as you might have liked (e.g. they might not include physiotherapy after an accident or may only offer limited sessions).  This is why full health insurance can be a great investment.

Insuring your income

For most people, their income is dependent on their ability to get to work.  If your ability to get to work depends on you having your own transport of some sort, then it’s a good idea to give your vehicle a thorough check and take any necessary action before the cold really sets in.  You may also need to think about whether you should take any other precautions related to travel in cold weather, such as upgrading your insurance to include accidents and perhaps even a call-out service.

You may also want to think about what would happen if a long-term illness or injury left you unable to work for any length of time (or to function as a parent, a carer or in any other capacity).  Depending on your stage in life, you may be able to get by with a basic emergency fund, but if you have people depending on you in any way, such as for childcare, then you may want to look seriously at Critical Illness Cover for protection during long-term illness.

Insuring your property (and its contents)

Most people will probably already have insurance for their home and contents, however, you can reduce the chance of needing to make a claim on your buildings insurance by making sure that you have done everything possible to ensure that it can withstand everything the weather is going to throw at it.  Now is also a good time of year to review your contents cover to ensure that it is still an accurate reflection of what is inside your home and to think about any potential large purchases you may want to make, either at Christmas or in the January sales.

For motor insurance, mortgage payment protection insurance, building and content insurance and general insurance products we act as introducers only.

 

Making sure you do end up owning your own home

Making sure you do end up owning your own home

In the residential property market, the general idea is that you buy a home in which to live and that ultimately you will end up owning it completely, i.e. you will pay off your mortgage in full.  Obviously, there is some nuance to this, for example, people may decide to sell their property during the term of the mortgage and they may or may not choose to move directly into another owner-occupied property, but that’s the basic idea.  The bad news is that even if you do plan to stay in your property and pay off the mortgage in full, there’s no guarantee that you will be able to do so, the good news is that there are steps you can take to increase your chances of paying off a mortgage successfully.

Assume that the effective minimum term of a mortgage is five years

The length of a mortgage term depends on the agreement with the lender, but since houses tend to be big-ticket purchases, mortgage terms tend to be on the longer side (as in a couple of decades or more) to keep the repayments manageable.  Borrowers can exit the mortgage any time they choose by paying back the amount owed – and possibly a penalty as well.  Penalties have to be reasonable, but, in short, if the borrower exiting the mortgage early would cause reasonable damage to the lender (e.g. the lender gave them a special introductory deal), then a penalty may be applied as redress.  In practical terms, the costs involved in moving home are so high that it generally takes about five years to recoup them, therefore it only makes sense to buy (and take out a mortgage), if you are totally confident that you can stay in the property for at least five years.  Please note, that if your Plan B is to let out the property should you wish to leave it then you will need to swap your residential mortgage for a buy-to-let, which is a different mortgage application with different approval criteria and its own associated set of costs.

Flexibility is good so avoid over-stretching yourself

Resist the temptation to “get on the housing ladder” at any cost.  If you cannot afford the sort of mortgage you will need to buy a suitable property, then accept the fact and carry on renting while you increase your savings and/or income.  Remember that owning a home brings responsibility as well as freedom.  If you’re fed up of the restrictions imposed by landlords, you may be tempted to focus on the fact that you’ll be able to do what you like with your own home.  Once you actually own a home, however, you may quickly come to understand just why landlords place restrictions on what tenants can and cannot do with a property.  You may also come to appreciate how convenient it was just to be able to call a lettings agent/landlord and have them deal with problems/repairs instead of having to sort it yourself (or make arrangements for someone else to sort it).

Learn to love insurance

When it comes to mortgages, for most people the most obvious forms of insurance to take out are life insurance, buildings insurance and home contents insurance.  These may be very wise investments (although, as always, make sure you get the right cover for your needs), however, you may want to extend this to income-protection insurance and/or critical illness cover, if you are self-employed or payment-protection insurance if you are employed.  For the sake of completeness, the infamous PPI scandal was related to the miss-selling of PPI, so basically it was a reflection on human behaviour rather than on the product itself, which can be a very useful purchase.

Your property may be repossessed if you do not keep up repayments on your mortgage.

 

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