Life and protection insurance

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Life and protection insurance glossary

Plenty of terms get thrown around in the world of protection insurance, but what do they all mean? This glossary breaks down the meaning behind some of the most used words in the insurance industry and makes sure you know what you might be signing up to.

Short-term income protection – choosing a policy

Short-term income protection, also known as STIP, can help you keep up with your rent or mortgage payments and other outgoings if you are made redundant or are too sick to work for a short period of time. Read more to find out how you can protect yourself in the short term.

Payment protection insurance – choosing a policy

Payment protection insurance, also known as PPI, can help you keep up with a loan or credit repayment if you are made redundant, or find yourself unable to work due to illness or accident. Finding the right policy can provide you with the reassurance that you will be able to meet the repayments in the short-term if something goes wrong.

How and where to buy payment protection insurance

Payment protection insurance (PPI) will help cover repayments if you’ve borrowed money and find yourself unable to work due to illness or injury or are made redundant. PPI products can be good value, but it pays to shop around and make sure you know exactly what you’re signing up to.

How and where to buy income protection insurance

Income protection insurance is important for many people, to give them peace of mind if they couldn’t work due to sickness or illness. It’s important to get a policy that will meet your needs in case you need to claim and getting expert help from an adviser is a useful starting place.

Whole-of-life policies

Whole-of-life policies payout a lump sum when you die, whenever that is. The size of the payout depends on your policy. With some policies, you can stop paying once you reach a certain age, but with others you have to make monthly or annual payments right up until you die. If you set up your policy in a trust, payment will be made to the trustees to distribute to the beneficiaries of that trust.

How and where to buy life insurance

Life insurance payments can start from just a few pence a day depending on how much cover you want, but also on the likelihood of anything happening to you. But even if you’re high risk, you don’t need to accept the first life insurance offer that comes along – it always pays to shop around.

Do you need dental insurance?

We all want to take care of our teeth. It makes good financial sense to get your dental treatment subsidised or free though the NHS. But if you can’t go to an NHS dentist, or you need to have a great deal of work done on your teeth, dental insurance might be a good idea.

How to claim for mis-sold payment protection insurance (PPI)

Payment protection insurance (PPI) has been mis-sold to millions of people, but the good news is you can claim compensation. If you think you’ve been mis-sold PPI, use this guide to find out how to make a PPI claim and why you shouldn’t use a claims management company. It also contains a PPI claim letter template.

Do you need income protection insurance?

Each year close to a million people in the UK find themselves unable to work due to a serious illness or injury (ABI 2015). Income protection insurance is designed to give you some cover if you can’t earn an income for those reasons. If something happened to you would you be able to survive on savings, or on sick pay from work? If not, you’ll need some other way to keep paying the bills and you might want to consider income protection insurance.

Do you need critical illness cover?

Critical illness cover, also known as critical illness insurance, is a long-term insurance policy which covers serious illnesses listed within a policy. If you get one of these illnesses, a critical illness policy will pay out a tax-free, one-off payment. This can help pay for your mortgage, rent, debts, or alterations to your home, such as wheelchair access, should you need it.

Income protection – what does a good policy look like?

Use these simple tables to check what features are a ‘must have’, a ‘should have’ or a ‘could have’ when comparing income protection policies. This is a complicated product to research and buy, so to be safe, get professional advice from an independent financial adviser or insurance broker.

Life insurance – choosing a policy

Getting the right life insurance policy means working out how much money you need to protect your dependents. This sum must take into account their living costs, as well as any outstanding debts, such as a mortgage. This guide will help you understand the different types of policy available, how they work and the difference between joint and single cover.

Do you need life insurance?

Not everyone needs life insurance (also known as life cover and death cover). But if your children, partner or other relatives depend on your income to cover the mortgage or other living expenses, then the answer is yes – you probably do want life insurance, since it will help provide for your family in the event of your death.

Income protection insurance – choosing a policy

If you become too ill to work and have the right income protection insurance policy you will receive an income until the policy expires. Picking the right cover means matching your needs and personal circumstances to the best policy available. You might need to get professional advice from a financial adviser to help you decide.

Do you need private medical insurance?

Private medical insurance (also known as health insurance) can supplement what’s available on the NHS. If you don’t already have it as part of your employee benefits package and you can afford to pay the premiums, you might decide it’s worth paying extra to have more choice over your care.

Do you need payment protection insurance (PPI)?

Payment protection insurance, also known as PPI, is a type of short term protection. This type of policy covers you for a loan payment if you are made redundant or find yourself unable to work due to an illness or accident. The right policy means you will be able to meet your payments if something goes wrong.

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