WHY... do I need it?
In many instances the answer is pretty obvious. Having insurance is a legal obligation if you want to drive a car, for example, while buildings insurance is compulsory if you're after a mortgage. The usefulness of other policies depends on circumstance: if you're getting married you may want peace of mind of knowing your big day is protected, while if you're a dog owner then pet insurance could prove very handy when faced with an unexpected veterinary bill. In between is a whole range of more general policies designed to protect family and finances. Life insurance could help children or a spouse support themselves after you've gone, accident insurance pays out for listed permanent injuries and income protection could meet your outgoings if your wage suddenly stops.
WHEN... should I get it?
Where it's required by law, the answer is pretty obvious. For other types of insurance it will depend on what or who you want to protect. From holidays to your health, a smartphone to your salary, you'll need to assess what it would mean for you or your loved ones if they were put in jeopardy or taken away completely.
WHERE... can I buy it?
There are plenty of insurance companies vying for your custom. These days you can purchase a policy online or at your local supermarket, through your workplace or at the post office. However, with so much choice it's best to consider exactly what policy you need and how much to expect to pay before searching for a provider. Getting impartial advice to inform your decision is invaluable. The Money Advice Service is a good place to start. It offers free and unbiased information on both insurance cover and cost. Set up by the government, you can access their tips and tools on their website, by phone, in printed guides or by visiting an adviser in person (they have a network throughout the UK).
HOW... does it work?
Once you've decided what you want to protect, you'll need to hunt for a policy that covers it. It's important to read the documents carefully beforehand to find out if there are any exclusions (if you're jetting off on a snowboarding break, for example, you'll probably need specific winter sports cover). Then check the premium. This is the monthly or annual payment you'll make to an insurance provider throughout the term of your policy. It will vary depending on the value of what you're covering, and the risk associated with keeping it safe. Ultimately, insurance works by paying out an agreed sum of money if the policyholder makes a claim that is covered under the terms and conditions of the agreement and providing they have met all their premiums.
