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Personal
Insurance
This
section covers pet, travel, ASU and payment protection
insurance
General insurance covers events that may or may not happen, such as accident, fire or theft, as opposed to life assurance, which covers an event that will definitely happen sooner or later, such as retirement or death.
The aim of taking out any insurance policy is to compensate you following a loss so that you are, in general, as well off - but no better off - than you were before the loss occurred.
An insurance policy is a legal contract and your rights as the holder of the policy will depend entirely on what is written in the contract and on any endorsements which may be added to it.
In some cases, the State provides insurance by, for example, paying incapacity benefit if you are unable to work due to illness. You may also find that your employer provides certain health insurance cover, such as income protection insurance or private medical insurance.
However, it is highly unlikely that any third party will provide for your general insurance requirements. Arranging insurance cover for your home, your car, your pet and your holiday is going to be up to you.
Different
types of cover;
Pet Insurance
They are our best friends and often one of the most important things in our lives, yet we often leave them uninsured and the consequences can be expensive. Your dog or cat may suffer an accident, become ill or injure somebody.
Pet insurance plans can cover such eventualities as your pet having an accident, sickness, compensation for having to cancel your holiday, money for advertising or to pay a reward if your pet is lost or stolen.
The level of cover varies with each policy, but most provide cover for the following categories:
Vet Fees
Death Benefit
Holiday Cancellation
Boarding Fees
Theft/Straying
Advertising/Reward
Third Party Liability
Accidental Damage
You should always check the small print on your policy for exclusions as some things aren't covered, for example; the cost of treatment for any condition which occurred before the policy started, flea control, vaccinations or spaying and castration. There are also some types of dogs which cannot be insured, for example; racing dogs, guard dogs, working dogs or dogs registered under the Dangerous Dogs Act.
Travel Insurance
Travel and holiday insurance for travel in the UK and for international travel; what travel insurance and holiday insurance you may need. How annual travel insurance works and why you may need to take out separate ski insurance.
Every year UK residents make around 59 million overseas journeys. (Source: Department of Health website) We buy travel insurance for the same reason we purchase any insurance policy: to cover us when things go wrong. You may not be very impressed by the National Health Service but, remember, not every country has a free health service and you could find yourself facing a hefty bill if you fall ill abroad.
Then there are the problems which are not life-threatening but still stressful - lost luggage, cancelled flights and so on. The bottom line is it makes sense to take out an insurance policy unless you're prepared to find yourself out-of-pocket as a result of any holiday mishaps. However, if you're only going to be travelling within the UK you are unlikely to need holiday insurance, with the exception possibly of cancellation cover in case you need to cancel a pre-booked holiday.
ASU
Income protection - unemployment insurance, accident insurance; ensure your home is not at risk if you cannot work. Accident, Sickness and Unemployment insurance (ASU), can also be referred to as mortgage payment protection and will provide you with an income to meet your outgoings if you are off work sick, have an accident or are made redundant. It pays out a monthly benefit to cover your mortgage and other related costs.
You may choose the amount of benefit you would like to receive - although there are some limits on the maximum amount. The premium will be a percentage of the amount of monthly benefit you would like to receive. Benefits are usually payable for a maximum of 12 months.
Some policies will also allow you to choose whether you want to receive benefits for accident and sickness only, unemployment only or all three. Most policies will also have a 'deferment period'. This is the period of time you will have to wait after losing your source of income until you may claim the policy benefit.
Payment Protection Insurance (PPI)
Payment protection insurance (PPI) is sold alongside credit products, such as mortgages, loans and credit cards. It can offer valuable peace of mind to borrowers but many people have discovered, when attempting to claim, that PPI policies may not pay out. This guide explains how PPI works and whether you need payment protection insurance.
In theory, Payment Protection Insurance does what it says on the tin. It insures the repayments on most kinds of borrowing; including mortgages, credit cards, personal or secured loans or hire purchase agreements. However, PPI will only pay out if you cannot meet these repayments through no fault of your own - for example, if you lose your job or have to stop work as a result of an accident or illness.
In such events, PPI will pay out the level of cover arranged, typically for up to a year. Some policies, but not many, also include life cover so will also promise to repay your entire outstanding loan if you die before it is paid off.
The way PPI is charged will depend on the type of credit you want covered and where you buy it from. If the borrowing constitutes 'continuous credit', such as credit cards, mail order or overdrafts, PPI will be charged on a monthly basis.
If the credit is for a fixed term, such as a personal loan or a hire purchase agreement, it may be charged as a 'single premium'. As its name suggests, single premium PPI is paid in one go and upfront. The lender calculates what you owe on the insurance over the whole term of the loan - five years for example - and this sum is then added onto what you are borrowing.
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