Although we can’t always stop the unforeseen from happening, there are occasions when we can safeguard our families from some of life’s most severe financial consequences. With so many options available to us, it can often be challenging and difficult to choose the correct amount and type of insurance for your needs. But, with an overview of the best types of optional insurance plans available to you, you should be able to make the best insurance decisions for you and your family so that you are covered now and in the future.
Loan Protection Insurance
Personal loans are useful for a huge range of things. From consolidating debt to getting the funds to give your home the remodel it needs, to covering the cost of a new car, personal loans are a great way to fund expenses that you cannot afford to cover the full cost of right away. However, should the unexpected happen and you are unable to work and find the funds to cover your loan, you could find yourself in a tough situation. Loan protection insurance helps relieve some of the stresses associated with taking out personal loans in the first place. Should you fall ill or be retrenched, or otherwise be out of a job for whatever reason, this type of income protection policy can cover your debt repayments until you find your feet again. Remember that loan protection policies are different from unemployment insurance, which we will discuss next.
If you find yourself without work involuntarily, unemployment insurance provides you with a monthly income that is tax-free for a total of one year. It serves as your own personalised financial safety net in the event that you lose your position due to events beyond your control. Payouts come in the form of a tax-free monthly payment that is deposited directly into your bank account. This policy and monthly payouts enable you to continue to keep up with your financial commitments and household obligations without accruing debt while you look for new employment. Be aware that before you can claim, you must first finish an initial exclusion period after signing up for your policy.
Many people buy life insurance to support their relatives and households in the wake of their passing. Life insurance policies will typically make a single large payment if a person dies or sustains a serious injury, but some policies allow you to choose to have amounts paid over time at periodic intervals. Private companies that offer life insurance will typically charge you a set rate depending on the amount of protection you need, so you can customise the policy to cater to your finances. Adding life insurance to employees’ benefits is another practice that is quite widespread among businesses, so you may be fortunate and already have one in place.
The UK’s Money Advice Service website offers some very helpful information if you’d like to know more about the different types of various insurance products, insurance companies, and the situations in which you may require insurance. If you are still unsure of what you may require, then an insurance broker should be able to provide the information you need.