It is very true that not everyone needs insurance. If you are a single person with no dependents then you may consider it a waste of time as you are leaving no burden and that lump sum is of no benefit to you. For the main breadwinner in a family with small children, however, the need is very obvious. Take away that main income unexpectedly and it would not take very long before the financial stability of the family is seriously affected.
Life assurance is a staple form of protection that most of us not only understand but also see as a necessity. The most common reason for investing in life assurance will be to cover a mortgage but it is also part of the review we undertake perhaps after getting married or, more likely, when we have children.
Regardless of whether you are single or have 10 dependents, if you are suddenly unable to work, your earned income may disappear completely – and this has a direct impact on you as well as on those around you. Income Protection is less well known than life assurance but potentially has more applications, replacing your income in the event you are unable to work. Typically, you can cover up to three quarters of your gross income – less any state benefits which you become eligible for.
The other main type of cover which all of us should consider is critical illness cover. Like PHI, this pays out while you are still living but become incapacitated through serious illness or accident. Like life cover it pays out a lump sum, the objective of which is to help you fund changes which may need to be made to your lifestyle as a result of that illness.
Private Medical Insurance gives you the option of private healthcare, with the insurer meeting the healthcare costs of consultant care, operation and hospital treatment.