Insurance

Life Insurance

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Life insurance is a type of insurance that pays a benefit upon the death of the insured person.

One reason for having life insurance is to make provision for a spouse and family if the breadwinner of the family dies, or is critically injured. It is entirely understandable for the working partner in a marriage to want their spouse and their children to continue in live in the manner that the working partner would want to provide if they had not died prematurely!

An additional reason could be to ensure that a debt was paid off in the event of a premature death. This may include ensuring that any debts or mortgages on the family house are paid off. This would prevent the house being repossessed if the mortgage, or other debts secured on the property, could not be paid.

One important consideration when taking out life insurance to ensure that the debt on the family home was cleared, is that it is not sufficient just to have an insurance payout which covers the outstanding debts secured on the property.

The surviving partner, often the wife, will probably have no income following the death of the bread winner. Even if thay are able to go out to work to pay the bills then there are still issues with paying for child care. In reality, it is likely that the wife would not be able to get a high enough income to replace the lost income of their partner, at least not in the short term. This is a practical consideration which obviosuly does not apply to all families!

The point of the above comments is that the life insurance cover should provide enough income to provide for the family, at least until the youngest children have left school.

What will your dependants do if you die prematurely?

Is your family protected financially and will the beneficiaries get the benefit you want them to receive after your death.

Have you been refused Life Insurance because of your health but still need cover.

Household Insurance

Buildings cover pays for damage to your home caused by events such as fire, etc. It is essential that all house owners have this insurance. No one wants to pay off a mortgage on a house which has destroyed in a fire and there is no money to rebuild it!

Contents cover insures your possessions, clothes, furniture, kitchen, children's toys, momentoes, in fact everything you may value.
Again it is essential that the insurance covers the value of these possessions. If you pay premiums based on a contents value of £20K, you won't get too far claiming for a loss of £50K! You will also need to specify any individual items of more of a specified value. Check with your insurance policy to see what these restrictions are.

Be accurate with the value of your possessions, no one will check unless you make a claim but that is when you may find that you are not fully insured!