Consider your insurance options
Cutting down on your personal insurance cover seams ideal when trying to lower outgoings, however many of these products are designed to provide help to you in times of need.
A review, carried out on behalf of AEIS, has shown that many of us are planning to cancel insurance policies to save money. 27 per cent of the consumers surveyed, planned to reduce their medical insurance and 17% were considering reduceing pet insurance.
The CEO of AIS, says that it is a bad sign when consumers reduce the cover of the very policies that offer protection.
Tony Solomon, agrees with this view, saying people should think twice before cancelling, because loss of cover may adversely effect their family and themselves in the years to come. term assurance and critical illness insurance are both too important to sacrifice. If the worst happened and you died, or fall seriously ill, then cancelling your insurance 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 process and cost involved in replacing possessions, if they are stolen. He advises everyone to take out home 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 insurance may appear to be unnecessary, but without cover you may struggle to pay an expensive vets bill in an emergency. So which policies are you safe to cancel? Referring to medical insurance, Solomon says that many people get free health insurance from their employers. However, protection of your family is important. Therefore, it would be advisable to choose Critical illness, which pays out a lump sum, rather than mortgage life assurance or medical insurance.