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Insurance : Do You Care More About Your Pet Than Yourself?

Latest figures from the UK’s insurance industry show that over half of the nation has no life insurance cover. Only 1 in 5 of us has any accident insurance. And less than 1 in 10 of us will take out any type of income protection insurance. By themselves these figures should be a little concerning, but when you add the fact that 1 in 4 of us in the UK has some form of pet insurance, you start to wonder whether or not our world-wide fame for being a nation of animal lovers may have gone a little too far!

Prudent financial management advisors will tell you that you need to have approximately 3 months’ worth of liquid savings that you lay your hands on in the event of an emergency – such as being made redundant. The national average in the UK is 17 days. Yep, that means, on average, each of us can last 17 days before serious financial hardship begins to set in! This cavalier attitude, of “nothing bad could possible happen to me”, has many within the financial sector extremely concerned that as a nation we Brits are not taking our financial future very seriously. So, what type of insurance should you be thinking of to correct this?

Life insurance

The option of whether or not you want to have life insurance is a very personal one. However, given that your loved ones will be responsible for your affairs after you die, it would seem to be a little selfish if you then decided that you won’t take out any life insurance as you’re unlike to see any benefit from the scheme! In fact, ideally, most of us should try to ensure that we have a life insurance which will pay our loved ones a sum of around £175,000 to pay for our funereal costs and to clear any debts we have. Remember, this is really the minimum sum you should insurance yourself for – as your loved ones are highly unlikely to become rich on this.

Income protection insurance

Previously, income protection insurance was seen as a bit of a waste of money. This negative attitude arose because of a combination of unemployment benefit and knowing that if we did lose our jobs, we’d likely receive some form of severance bonus. Today, however, things have changed. 1 out of every 5 Britons today is self-employed. If anything happens, then it is extremely likely that there will be no income, no severance pay and lots of debts to pay off.

Personal loan and credit card insurance

It is possible to take out insurance to cover repayments on your personal loan or credit cards should you be faced with financial difficulty as a result of losing your job. Obviously you’ll need to assess the risk of whether you think you’ll be able to pay the debt without having any insurance. Part of this risk assessment should also include how long you intend to borrow the money for. For example, it is a lot easier to speculate where you might be 1 year from now than 5 years from now. So, if your loan is for 1 year, you may feel you don’t need any insurance. However, could you feel the same way if the loan was for 5 years?

It seems bizarre in this modern age that so many of us have little or no savings so that we would be facing Victorian era hardships if we were ever to be faced with a period of financial hardship – such as losing a job. This amazement is compounded when you consider that it is very easy to insure yourself against most of these circumstances for less than a night out on the town each month.


Posted on: [ November 03, 2017 ]       Add to Del.icio.us   Digg it   Add to Blinklist   Add to FUrl   StumbleUpon