Insurance Guide
Insurance is as critical as income today. Although the kind of insurance may vary, the common factor is that you have to pay an annual or monthly premium for all of them. The amount of premium depends on the number of risks involved. The insurer decides this after evaluating the probability of a claim being made against your policy. It also depends on the excess amount. For example if you make a claim of £1000 and you have an excess of £100, the insurer will pay you £900. The higher the excess, the smaller the premium you pay.
Insurance benefits depend on how smart you are as a consumer. Always read the small print very carefully and ask a lot of questions. Make note of the exclusions and restrictions that could affect you claim. The insurer should be somebody reliable and you should know hot to make a claim.
1. Accident Sickness and Unemployment Insurance: Commonly known as ASU, this insurance plan comes to your rescue if you lose your employment because of an accident, illness or redundancy. There is usually a waiting period before you get the payment, which depends on the specific terms of your plan. Income is normally paid for 12 months. The two types of ASU are mortgage protection that takes acre of your mortgage repayments, and salary protection that provides for your living expenses.
2. Life Insurance: This plan provides financial support to your family in the case of your death. It can provide either regular income or a lump sum amount. However, in the latter case, the total amount would be slightly lower than what your existing spouse or dependent would have received if they had taken chosen a regular income plan.
3. Income Protection: Also known as Income Replacement or Permanent Health Insurance, this insurance policy offers tax free income if you cannot work because of an accident or ill health. The State Incapacity Benefit ranges from £54.50p and £72.15p. This depends on the duration of your sickness. However, if you are self-employed, the income paid under the insurance is normally calculated on the amount of your taxable income, or profits, during the 12-month period prior to you becoming unable to work.
4. Private Medical Insurance: This policy will come to your rescue if the National Health Service cannot. It allows you to choose the time and place of your treatment. This policy bears the cost of private treatment for curable medical ailments.
5. Critical Illness Cover: A disturbing statistic reveals that one in every three people in Britain will be diagnosed with cancer at some point in their lives. This and many other concerns have made British citizens more concerned about health cover than ever before. If you contract the critical illnesses covered by the plan, you will need to survive for a period of about 28-30 days before you can make a claim.
6. Household Insurance: This is divided into building and contents insurance. The amount would depend on the area, size and type of property. You may get extra benefits for having security devices and possessing a claim free record.
Tip: Select what you want to insure and decide the best policy according to the premium, period and other features in the small print.
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