A practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for the payment of a premium and a thing providing protection against a possible eventuality.
6 Types of insurance
- Home insurance
- Car insurance
- Travel insurance
- Life insurance, critical illness, income protection, and payment protection
- Private medical and dental insurance
- Pet insurance.
|What does home insurance cover
||Do you need it?
- Home insurance covers the cost of repairing or rebuilding your home if it’s damaged by storm, floods, fire, lightning, subsidence, etc
- Insurance provides protection against risks to property, such as fire, theft or weather damage. This may include specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance.
- Contents insurance
- Covers your possessions for loss or damage.
- BUT wont cover the the general wear and tear,and you wont be covered for properties left unoccupied for more than 60 continuous days.
- The car insurance It protects you against personal injury claims which can run into millions of pounds
- The third party covers other people (such as your passengers) involved in an accident, or damage to other people’s property, but if your car is damaged or stolen you have to pay for it yourself,
- fire and theft the third party covers repairs or replacement if your car is stolen or set on fire,
- and covers everything above and also covers damage to your own car.
4. Life insurance, critical illness, income protection and payment protection
What does life insurance, critical illness, income protection and payment protection cover?
Life insurance provides a monetary benefit to a decedent’s family or other designated beneficiary, and may specifically provide for income to an insured person’s family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity.
- It pays your dependants a lump sum or regular payments if you die,if your children or partner depend on your income to cover the mortgage or other living expenses.
- Check whether you have an employee package that includes ‘death in service’ benefits, if so, you may not need more life insurance or maybe just a top-up
- Critical illness insurance
- If you’re young and healthy, life insurance is very good value for money – providing high cover at a relatively low cost.
- It pays a ‘lump sum’ (or some policies will pay an income) if you’re diagnosed with a specific serious illness, for example:
- -Heart attack
- -Certain types and stages of cancer
- -Conditions such as multiple sclerosis
- Most policies will also pay out if you are permanently and totally disabled after an injury or illness.
- Income protection insurance
- Pays a percentage of your take-home pay if you can’t work for a while because you’re ill or disabled.
- It covers most illnesses that leave you unable to work,
- -You’re most likely to need it if you’re self-employed, or you don’t have occupational sick pay or savings to fall back on.
- -Your living expenses and bills should be covered until you can start working again or retire – depending on the term of the policy.
- You can claim as many times as you need to while the policy lasts.
- Payment protection insurance (PPI), and mortgage protection insurance (MPPI)
- Covers your monthly mortgage, loan, and credit card repayments in case you:-
- Have an accident
- Become ill and can’t work, or
- Become unemployed.
- BUT Health problems you had before you took out the insurance are very unlikely to be covered,and some cancers and ‘chronic’ conditions might not be covered, even if they mean you can’t work.
- Income protection insurance might not get cover if you have existing health problems or a dangerous job.
- It doesn’t cover you for unemployment
- You should Beware of different definitions of ‘unable to work’ this will mean different things in different policies – get advice before buying.
- Payment protection insurance
- Usually, it won’t cover you:
- For pre-existing conditions
- If you are self-employed, a temp or contractor
- If you are retired or unemployed
- If you lose your job within 3–6 months of taking out the policy.
5. Private medical and dental insurance
|What does private medical and dental insurance cover?
- Health insurance reimburses the cost of all or some of your medical bills if you pay for your own healthcare.
- Basic private medical insurance covers most in-patient treatments (tests and surgery) and day-care surgery. Some policies also cover out-patient treatments (such as specialists and consultants)
- You get free treatment on the NHS, so you only need private medical insurance if:
- You think you might need treatment you can’t get on the NHS, like specialist surgery for sports-related injuries, or certain cancer drugs or treatment.
- You just don’t want to use the NHS and would prefer to stick to private hospitals and clinics where possible.
- You can ask your GP to refer you to a private expert or specialist
- If the NHS won’t let you have a scan or makes you wait, you can use your cover to pay for it
- You can use your insurance to reduce the time you spend waiting for NHS treatment.
- Dental insurance
- Covers routine check-ups, as well as the costs of all dental work, including dental accidents and emergencies.
- If you need to have a great deal of work done on your teeth, dental insurance might be a good idea.
- If you need a lot of treatment, dental insurance can provide good value for money.
- BUT Private medical &dental insurance
- It doesn’t usually cover treatment for:
- Pre-existing medical conditions
- Chronic illnesses such as diabetes, mental health issues and depression
- Cosmetic surgery
- Routine check-ups
- It can be expensive, depending on what types of treatment you want to be covered for.
- Premiums rise every year, and with age, so by the time you’re older and more likely to need hospital treatment, you may not be able to afford the premiums.
- Dental insurance
- It doesn’t cover cosmetic work on your teeth,
- You can normally only start to claim between one and three months after you buy the insurance
- Premiums may increase if you make a claim for anything other than a standard check-up.
6. Pet insurance
- Pet insurance insures pets against accidents and illnesses; some companies cover routine/wellness care and burial, as well.
- It’s most needed if you have a breed of dog or cat that’s likely to cost you a lot in medical care
- The insurance Covers the cost of veterinary treatment for your pet,
- Veterinary bills are costly and rising all the time – if your pet gets a very serious injury or a chronic illness, pet insurance can be good value for money.
- if you can’t afford the cost of treatment out of your spare income, you should consider getting insurance.
- BUT You should Keep up with regular vaccinations or your pet insurance won’t pay out if you need to claim.
- Annual jabs, spaying and neutering are not covered.
- It’s difficult to get cover for a pet that is old or already has a medical condition.
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