How to determine which insurance cover you need

There are many different types of insurance on offer – like car insurance, home insurance, medical insurance, life insurance… the list goes on. However, learning about those different forms of insurance can leave you feeling rather concerned. Do you actually need all of this cover? Would you be unnecessarily putting yourself at risk if you didn’t opt for it? The answers to those questions depend very much on your personal circumstances.

Home is where the insurance is?

Of course, if your finances are already looking pretty tight, you might think that the question of which insurance you should take out has largely been answered for you. If you can’t afford every single form of insurance applicable to you, then you would have to limit your options anyway. Taking this approach would mean having to discern which cover is most essential.

One type of cover that could easily fit that description is home insurance. There are two subcategories of this insurance: buildings insurance and contents insurance. If you own your home, then the former is legally required anyway – and mortgage lenders typically demand that you have buildings cover, the Money Advice Service points out.

From a practical point of view, buildings insurance could also save you much money over the long term due to how much it couldcost you to repair your residence if a fire or flood seriously damaged it.There’s no legal need to have contents insurance, but most people should still deem it vital, as it would typically enable them to get damaged or lost items replaced in a financially efficient way.

Is the car really the star with insurance?

Taking out car insurance can also be essential for many of us. That’s because if, as is likely, you drive a car on UK roads, the law requires you to have such cover that at least reaches the third party level. What is third party cover? This insurance covers people beside yourself – like passengers – caught up in an accident. It also covers damage inflicted on property other than your own.

However, were your own car to be stolen or damaged, you would need to replace it through your own financial outlay. This would not be the case if you had the type of car insurance called third party, fire and theft; this means that replacement or repair of your car, if it were set ablaze or stolen, would be paid for. Comprehensive insurance goes even further by covering all of the above as well as damage that your own car picks up.

In the UK, one penalty for forgoing car insurance while driving is a ban on driving; however, you might find that you drive a car only occasionally rather than regularly. Therefore, you could find that you can adhere to the law more cost-effectively by choosing short term insurance. You could source this through the UK broker Call Wiser, which can quickly compare policies from different providers.

Keep yourself in good health

We are fortunate to live in a country where medical care can be provided free-of-charge by the NHS as and when necessary. In light of this, the idea of taking out private medical insurance could initially seem peculiar. This insurance would allow you to, should you pay to receive healthcare, have all or some of the cost reimbursed. The majority of in-patient treatments and day-care surgery would be covered by a basic policy, whilethe coverage of some policies might stretch to out-patient treatments, too.

Keep in mind, however, that private medical insurance typically could not cover the expense of treating medical conditions that you already have at the time that you take out the policy. Such chronic illnesses as diabetes, depression and other mental health issues would also be out of the remit – as would pregnancy, cosmetic surgery, and routine check-ups.

As you might have gathered by now, there could be few situations in which having private medical insurance seems genuinely warranted. However, you might anticipate possibly requiring medical treatment that the NHS does not offer – like, for cancer, particular drugs or other treatment. Also, if you regularly play sports, this could lead you to incur injuries needing specialist surgery.

If you think any of these scenarios could easily arise in your case, then opting for private medical insurance can be sensible for your peace of mind.Even when you stick with NHS treatment, your cover could assist you in cutting how long you have to wait for it.

Insurance for life

If you are your household’s main breadwinner, with your income largely paying for essentials of your children or partner, then life insurance can prove hugely valuable. This is because, if you die, your dependants would receive regular payments or a lump sum to financially cushion the blow.

However, if ‘death in service’ benefits are included in your employee package, you might not strictly need any additional life insurance or anything more than a top-up. Furthermore, life insurance would only provide coverage in the event of your death; it would not come into play if illness or disability prevents you working.

If you are considering life insurance, then it can pay dividends to get it when you are young and healthy. The premiums would be relatively low then, whereas they could be high should you become beset by a serious health problem. Worse, by that point, you might not be able to get life insurance at all.

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