Types of Insurance in the UK

by ratewise

If you are considering types of insurance in the UK, then you will need to know which are truly necessary. The insurance industry in the UK is so massive that consumers can compare different types of insurance and their providers on different websites. From there, you can compare them side by side and see which one is the best for you.

Buying insurance is not a simple process, there is more to it than meets the eye. For example, if you have just started living on your own. You just graduated and got a job with a moderate salary. Then you decided to get a car. If you buy a car, you also need to pay for car insurance.

When you consider other types of insurance such as life insurance, home insurance, and many more, the cost for all these will eat up a significant part of your salary.

This is why deciding which type of insurance to go with and who to buy your insurance from is a very key decision. To help make this process easier and simple we have decided to write this guide on types of insurance in the UK.

How does insurance work?

When you buy an insurance policy, you are required to make regular payments. These payments are known as premiums. For example, if you buy an insurance policy for health, you will be paying a premium.

That price for that premium will depend on the insurance provider you are going with. But if by chance something happens in the future and you become ill, your insurance provider will pay you a sum of money according to your insurance policy.

But you will need to file a claim, if you do not file a claim you will not get your money. For this insurance policy, to claim your money, you will need to have some kind of health care cost.

If you do not become ill or injured, you will not get your money back. Ultimately, this is how insurance providers tend to make their money.

Different types of insurance policies

Life insurance:

This is the most common form of insurance policy we are most familiar with. For example, if you are the only provider for your family. Your job is the only source of income for them. If something happens to you who will provide for your family?

To avoid these kinds of situations, you can get a life insurance policy. Under this type of policy, the future of your family will be safe whether you are with them or not.

There are different types of life insurance policies. One is term life insurance, where you will be paying for a fixed premium for a fixed period of time.

It could be that you will be paying the same premium for the next 10 years or 15 years. After the fixed period, the price for your premium will increase and you will need to pay a much higher premium.

Another type of life insurance is known as permanent life insurance. These insurance policies have a steeper premium rate, but the rates tend to stay level throughout your lifetime.

The first option is great for families who are just starting and do not have that much of an income to spare for insurance premiums. So, they can go with the first option and can think about paying the higher premium rates later.

The second option is for people, who have a stable income and can spare the expense for the higher premiums. This is also a great option as the premium rates stay almost the same throughout your life.

Mortgage insurance:

There is a possibility you already have mortgage insurance from when you bought your house. This is a great option as you will not need to worry about paying off the mortgage for your house when you die.

Travel insurance:

If you are someone who is a frequent traveller, then you definitely should consider getting travel insurance. You may think I already have health insurance so why should I have travel insurance?

When you travel outside of your country, your health insurance might not cover international health costs. And even if they do, you will need to pay for the treatment from your pocket and then expect to get reimbursed later. This can be a really excruciating and time-consuming process.

Car insurance:

These days car insurance is one of the most common types of insurance policies out there. Car insurance is really important as they help you save a lot of money on the maintenance of your car. It also protects you if you are ever in an accident.

Conclusion

There are lots of different types of insurance policies available out there. But whatever you choose, do proper research and read the policy. Reading the policy will let you know what your insurance covers and what they do not.

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Categories: Insurance Tips