Do not cut your insurance down
Cutting down on your insurance appears easy when trying to reduce costs, however many of these products are intended to cover you in times of need.
A customer survey, carried out on behalf of AEIS, indicates that many of us are planning to cancel insurance policies to save money. 27 per cent of the consumers surveyed, planned to reduce their health cover and 17% were considering canceling pet insurance.
The managing director of Morethan, says that it is a worrying development when consumers cancel the very products that offer protection.
Tony Solomon, concurs with this opinion, saying people should think twice before cancelling, because loss of cover may have a damaging affect on their family and themselves in the years to come. life assurance and critical illness are both too important to sacrifice. If the worst happened and you died, or fall seriously ill, then cancelling your policy could leave your family with nothing, he says.
You are advised to talk to your insurer if you are having difficulty paying your monthly premiums, as they may be able to arrange a tempoary reduction in the amount of cover.
The BIBA, says that people do not appreciate the overall value of their possessions and the cost of replacing them, if they are stolen. He advises everyone to take out contents insurance, but to look at reducing your cover level, as they may not need every single item covered. For example, contents insurance costs about 149 pounds a year on average, but you should be able to save 25% by cancelling accidental damage and personal possessions cover.
Pet cover may appear to be unnecessary, but without cover you may struggle to cover the vet bills. So which policies are you safe to cancel? Referring to medical cover, Solomon says that many people get free health insurance from their employers. However, if this is not the case, it is of the utmost importance that you protect the future of your family financially. Therefore, it would be advisable to choose critical illness cover, which pays out a lump sum, rather than mortgage protection or private medical treatment cover.
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