Archive for the ‘Protection’ Category

Flood Risk – Check Your Insurance

Friday, September 18th, 2015

insurancefloodOne of the grim inevitabilities of the winter months in Britain is the prevalence of flooding.

Britain has experienced several years of above average rainfall that many scientists attribute to climate change.

In 2007, for example, the country was 20 percent wetter during the winter than any other year since records began in 1879.

Some studies have suggested that flooding is in part due to the development of towns, cities and farmland, preventing natural drainage from taking place.

Are you ready for the rain? This article is a quick guide to the likely risks of flooding and the steps that you can take to make your home safe from the high waters, or insured against them.

Waterlogged postcodes

Towns like Boscastle in Cornwall that was virtually swept away by flooding in 2004, or Hebden Bridge in 2012, are reminders to Britain and to the insurance industry, that some areas pose higher risks of flooding than others.

Insurers pay a great deal of attention to scientific information on flooding and calculate insurance premiums accordingly. As risks change, so the insurance industry devises new products to insure against them.

There are two types of flood risk insurance: buildings flood insurance that covers structural damage to your home, and home contents flood insurance that covers your belongings and furnishings.

If you have standard buildings and home contents insurance but you live in a high risk flooding area, you will need to change your policies to specific flood risk cover.

If you don’t have flood insurance and your home is damaged by flooding, there is a chance that your insurer will not pay out on a standard insurance claim.

Flood Maps

The Environment Agency has some sound advice about how to prepare for the possibility of flooding. It is important to visit the agency’s flood risk map to see if your home is likely to be affected.

The agency suggests that homeowners and business owners should create a flood plan before bad weather begins.

In addition to this, it is advised that you prepare your property’s flood defences in advance.

This could involve investing in a consultation with a surveyor or an architect to assess your property’s flooding needs.

A flood protection advisor can also be contacted, who will give an assessment of the costs involved in protecting your property from flooding.

If you find that insurance costs for your property are high, or that the level of risk to insurers is so great that they will not insure you at all, there are still options.

You might want to consider consulting a mortgage broker who can help secure a policy from specialist insurers who offer policies on higher risk homes.

There is also help and advice available at the National Flood Forum, who have a list of insurers who have signed up to the forum’s Charter for Flood Friendly Insurance.

Insurance Against Flood

As with most potential disasters, nine tenths of the solution lies in pre-emptive action. It is important that you identify your level of risk and work with the official and industry bodies that exist in order to limit it.

Insurers will tend to look more favourably on claimants who have done whatever they can to limit the risks and prepare for the potential deluge.

The alternative is a large clean up bill and an unsympathetic insurer.

During a crisis, when there are numerous claims being made against insurance policies, and shareholder profits to protect, insurers will create their own criteria about who they consider to be worthy of a pay out.

By prudent action now you can get yourself on that list.

Is Life Insurance Still An Asset For The 50+?

Friday, September 11th, 2015

asset50Most people start families in their 20s or 30s and this is also the first time they think about family protection, life insurance and making sure that their loved ones are taken care of if they die.

Once this life cover is purchased, it is common to forget all about it and only review it every couple of years when a review of ones finances is due.

Decades later, when your circumstances have changed and your family has grown up, it might be tempting to question whether a life insurance policy is necessary at all.

However, cancelling a policy might involve hidden costs. This blog post is a quick guide to the possible pitfalls of cancelling your policy.

Changing Circumstances

If your children are over the age of 18 or a substantial part of the mortgage is paid off, there might be little reason to keep your policy.

It seems rather obvious to say, but if you cancel your policy the first thing you will lose is the cover it offers.

If you need to take out a future policy for any reason, you will find it far more expensive in terms of monthly payments than the original agreement.

Some policies are designed to pay for the cost of schooling and university education of children if a parent dies, but this might seem redundant if your children are now grown up and have left home.

You might also find that you still need a life insurance policy as grandchildren could become dependents and the financial future of your partner might be in jeopardy if you pass away.

It might be that if you died over the age of 50, your partner could still be several years away from retirement age, and may therefore be dependent on an additional source of income that a policy could provide.

What are the savings?

If you cancel your life insurance policy you will save the cost of the monthly contributions and in today’s economic climate this could well be ready cash you can’t do without.

However, whilst you might be making savings to your financial plan in the short term, the financial risks to your family dramatically increase if you were to unexpectedly pass away.

Life insurance in many ways is a far wiser investment for families with less disposable cash than others, as the financial pressures on wealthier families in the event of bereavement will be lesser.

Lower Insurance Premiums

Cancelling a policy outright is not the only option open to policyholders facing financial difficulties.

It might also be possible to agree with your policy provider to pay a reduced contribution or to have a lower level of cover for a period of time until your financial situation improves.

Most UK life insurance policies have no charge for cancellation, but if you do cancel and then re-apply for cover, the increased cost of a new policy will act as an unofficial penalty.

Protecting My Family

One possible way of spreading the costs of life insurance is to look at the cover both you and your partner have.

When you initially took out life insurance cover, you might have decided with your partner to take out a joint policy. Normally they cost less than two separate policies and are a lot easier to set up.

However, if you have two separate policies, it might be worth exploring whether taking out joint cover is more cost effective.

Much of this will depend on the age and relative health of both policyholders, but the good news is that nearly all over 50s are accepted on to new life insurance policies, without the inconvenience of a medical.

Why Do I Need Life Insurance?

Tuesday, June 9th, 2015

FB - Life InsuranceNo matter what anyone tells you, you don’t need life insurance.  Like the old saying goes “you can’t take it with you”.  Once you’re dead, money stops being a concern.  Of course, your having life cover could make a world of difference to your loved ones.  In the short term, it could help prevent their grief being compounded by financial anxiety.  Over the longer term, it could allow them to enjoy a better quality of life than they would have managed without it.  Let’s look at some basic questions about life insurance.

Why Take Out Life Insurance?

There are basically two reasons for taking out life insurance.  One is because you have to and the other is because you want to.  An example of the former is being required to take out life insurance as a condition of a loan, such as a mortgage.  An example of the latter is family protection.  In other words, making sure that the people who love and depend on you can manage financially in the event of your death.  When looking at this issue, there is one very important question you need to be able to answer.

How Much Is My Life Worth?

You are unique and irreplaceable.  There is, however, a fair chance that a lot of what you do every day is far from unique.  This is just as well because there is also a fair chance that somebody else will need to do it if you die leaving family or other dependants behind.  It’s entirely possible that at least some of these people will need to be paid for their services.  Therefore even if you are purely a home-maker rather than a breadwinner, your life does have a financial value.  If you also bring in an income then it is highly advisable to look at the impact of losing this.

I Have Savings And Have Made A Will So I’m Already Protecting My Family.  Do I Still Need Insurance?

Well done for making a will.  It would, however, still be a good idea to look at life insurance.  First of all, it will give you an opportunity to check whether your savings would be enough to protect your family in the event of your death.  Secondly life insurance payouts can be excluded from probate.  In very simple terms this means that your intended beneficiaries can receive the insurance funds in a relatively short time-scale – possibly long before the process of probate is completed.  This can go a long way towards easing the financial impact of your death.

My Financial Plan Doesn’t Leave Enough Money For Life-Insurance Premiums.

There are two ways to look at this issue.  One way is to review your financial plan thoroughly to see if there are any changes you can make so that you can afford the premiums.  The other is to see what you can do to get lower insurance premiums, which you can afford.

In very simple terms, premiums are priced based on the statistical likelihood of you dying within the term of the policy.  While there’s nothing you can do about your age, you can control your lifestyle.  For example, if you’re a smoker, giving up will both free up cash and make you more attractive to life insurance companies.

It’s also worth looking at what different types of cover are available.  This may help you to get the cover you actually need at a price you can afford.  For example, if your main goal is to pay off a mortgage, then it may be more affordable to take out a policy which decreases in value over its term, rather than one which provides the same level of cover from beginning to end.

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