Protecting your home
Although you have no legal obligation to insure your home, your mortgage company will want to protect their investment with buildings insurance policy. However, it is also worth protecting your own investments, so even after you’ve paid off your mortgage, you should ensure you’re financially covered.
Home contents insurance and personal possessions insurance policy
According to Money Observer, the average home has £44,000 of contents and Replacing this without insurance policy would be almost impossible for most people. An average premium is about £150 a year and will supply cover up to £50,000. The majority of contents insurance insurance policies additionally leave public liability and personal legal expenses and although most people don’t claim on these, they could be very useful if needed.
Personal possessions insurance is worth taking out because often it covers your belongings outside the home, as well as inside the home, and is often incorporated into your contents insurance. Personal possessions insurance policy is also frequently referred to as all risks insurance and offers cover on possessions that are lost or stolen outside of the home.
Income protection
Income payment protection insurance policy is recommended by most insurers as the most appropriate way to safeguard your mortgage repayments and any other monthly bills. Kevin Carr, a senior technical advisor at LifeSearch believes that this is a better option than payment protection alone, including accident sickness unemployment (ASU) and mortgage payment protection insurance policy (MPPI). In a recent statement, Carr revealed that “the banks and mortgage lenders make huge profits from sales of payment protection. For instance, 17% of Lloyds TSB’s profits come from this.”
Debts – you don’t want them to haunt you
In addition to safeguarding your income to assist with loan repayments, you may also wish to consider personal finance products such as life assurance and critical illness insurance, which, under certain circumstances supply a lump-sum that can be used to pay off the mortgage in difficult circumstances. The choice of life assurance or critical illness cover will depend on personal variables. For case, if you are single and have no dependents, then nobody would welfare from your life being heavily insured. However, should you be diagnosed with a serious illness, a lump sum might be helpful to insure you maintain a reasonable quality of life. Personal accident plans can be helpful if you believe the specific conditions of the policy would be relevant to you. Examples include insurance policy providers such as Nationwide who will supply cover of around £50,000 for the loss a limb, £10,000 for a hip and £2,500 for a toe, in relation to a premium of £4.95 month.
