What Insurance Cover Do You Need?

In principle, you should have insurance cover for anything you can’t afford to lose.  Technically, you could self-insure.  Realistically, when bills could be significant, having an insurance policy is often the only practical option.  If you’re a homeowner, here are some types of insurance you should definitely consider.

Income-protection insurance

If you are in employment, check carefully to see what benefits, if any, your employer will pay if you become unable to work for any reason.  Some employers may offer generous support.  Others, however, will offer more limited support packages or will simply provide statutory sick pay.  In these cases, it could be very useful to have an additional safety net in the form of income-protection insurance.

If you’re self-employed then you’re responsible for your own pay and benefits.  You may qualify for state benefits but you may not want to rely on them.  You might also prefer to avoid the hassle of claiming them.  Income-protection insurance could protect your income against the results of illness or injury without the pain of having to deal with the Universal Credit process.

Critical-illness cover

Critical-illness cover pays out if you are diagnosed with one of a range of critical illnesses agreed upon when you took out the policy.  It can make a very useful partner for income-protection insurance.

Income protection insurance is designed to pay out due to illness or injury.  This means that it will typically pay out if you are diagnosed with a critical illness.  The main reason why it can be useful to have critical-illness cover as well is that critical illnesses can have serious financial implications.

For example, you may not simply be able to rest up at home as you would for a minor illness or injury.  Instead, you may need repeat visits to a hospital with the associated costs (e.g. travel and parking).  You might also benefit from extra help at home.  These costs will all come on top of your regular mortgage and bills.

Payment protection insurance

Payment protection insurance may still be associated with the mis-selling scandal of the 1990s.  The key point to understand, however, was that the mis-selling scandal, as its name states, relates to how PPI was sold.  PPI itself can be a very useful form of cover for people in employment, particularly if you have limited savings.

The whole point of PPI is that it covers payments on a debt (such a mortgage) if you are unable to undertake paid employment.  PPI is, therefore, only relevant to people on a PAYE wage/salary, not the self-employed.  If, however, you are a PAYE employee, PPI could give you welcome breathing space to find a new job if anything happens to your current one.

Health insurance

Health insurance will pay or help with paying for the cost of medical treatment.  Technically, it does not actually assist you with paying your regular mortgage and bills.  In practice, the quicker you can get back on your feet, the quicker you can recover your earnings power.

You can choose to rely on the NHS but having private insurance may open up other options.  For example, it could make it possible for you to choose to have your treatment at a time that suits you.  It may also pay for options that are not (currently) available on the NHS.

Specialised insurance for your assets

As a homeowner, you’ll probably already have regular buildings and contents cover.  It may, however, be worth checking to see if it would be better to have specialist cover for some of your assets.  For example, covering a bicycle under your home contents insurance might provide less meaningful protection than having specialist cycle insurance.

Life insurance

If you have dependents, then life insurance could help to make their life a lot easier in the event of your death.  If you have dependents living with you, life insurance could make the difference between your dependents being able to stay in their home and them having to move out.

For more information, please get in touch

For mortgage payment protection insurance, we act as introducers only.

There are other providers of Payment Protection Insurance [Short-Term Income Protection] and other products designed to protect you against loss of income. For impartial information about insurance, please visit the website at www.moneymadeclear.org.uk

For Specialised insurance, we act as introducers only


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