Insurance
Over the previous 50 years the insurance market has evolved at an astronomical rate. People are now able to insure themselves against a myriad of risks.
A Guide To Buying Insurance
Insurance is a blanket term that covers a massive number of products. In it's simplest form, you buy an insurance policy to provide financial cover in the event of something unexpected happening. Insurance is separated into two sub-headings, which are each divisible into dozens of other categories. These two primary headings are "General Insurance" and "Life Insurance".
General Insurance is a policy that is relatively short term and pays out when things go wrong. This can include buildings and contents insurance, home insurance, car insurance, mortgage payments (MPPI), travel insurance, and any number of other things.
Cheap Life insurance includes pensions - which most people don't think of as a type of insurance - and covers policies of a long-term nature that pay out at the end of a term, whether that be a pre-arranged period of time, or, quite possibly a lifespan. So when you buy, what should you do? What is an insurance broker? Here is a quick guide to a few basic steps to take.
Who to buy insurance from?
When it comes to insurance you can buy either from a broker, or from another intermediary, or direct. The title "broker" generally refers to someone who is independent, although many websites also classify as brokers, they generally aim to find you the best deal on the market.
Other intermediaries might quote the best deal from a small number of insurance companies, or even represent single companies. Travel agents, for example, selling holiday insurance count as intermediaries, as do certain mortgage lenders and shops that sell warrantee insurance.
If you go to a direct insurer you are going to the company which deals with the public. Though these will only offer you their own prices, they may still be cheaper than a broker who may take a certain commission.
These companies often have restricted conditions, particularly at the moment where the market is cautious, therefore if you have a bad claims record, or a poor credit record, a direct insurer may refuse you where a broker would be able to find you a deal. You can deal with the company in any number of ways, it is best to talk to them on the phone, but the internet is an option, as is talking to a salesman.
Who to complain to:
If you have any problems with insurance, an intermediary, or a specific insurer it is important to know who to complain to. Your first route should be to complain to the company or intermediary directly. All companies are required by law to have an appropriate and fair complaints procedure, and this should have been made clear to you right at the outset.
If you feel this is not appropriate you can refer your complaint to the Financial Ombudsman Services, which was set up to resolve disputes between customers and companies as a powerful, yet informal alternative to court procedure.
If you do your research properly it can often be cheaper to get a policy direct from the insurer than through an intermediary. For that reason, you should check a number of companies for the best deal they can offer, and one company that is always offering particularly good buildings and contents insurance rates is Legal & General who would make a good place to start your home insurance search.
Payment Protection Insurance
We all seek peace of mind and aspire to stablise / better ones financial situation, but how many people plan for the unforeseen? We all insure our homes, cars, and even our pets, but few think about insuring their income or debt repayments. Should someone be made unemployed or be rendered unable to work, how will the bills and current costs of life be safeguarded?
Mortgage Insurance
Mortgage Insurance is also referred to as MPI (Mortgage Payment Insurance) or MPPI (Mortgage Payment Protection Insurance). There are a wide variety of solutions in the current insurance market, so we would urge all insurance seekers to research each of the offerings in great detail. Mortgage payment protection insurance will in essence cover the mortgage payments in the event of unemployment, illness or death.
Mortgage disability insurance
Mortgage Disability Insurance is very similar to standard mortgage insurance and focuses on the risk of illness and subsequent inability to work and earn an income. Many mortgage disability insurance providers also insure against unemployment.
Income Protection Insurance
Income Protection Insurance will safeguard the applicants monthly income should they become rendered unable to work or unemployed.
Beware that many policies won't kick in for 60 - 120 days from the policies inception, equally the payment window from the date of the claim can be up to three months, therefore we would urge all applicants read the small print. Typically the more expensive the policy the stronger the cover and quicker the claim time.
Loan Insurance
Loan Insurance protects the capital debt and associated repayments should the policy holder be rendered unable to work or unemployed. Always read the small print and make sure that the loan insurance deal suites your needs, for example: how long is until the loan insurance company starts making the loan repayments on your behalf.