We are all familiar with the concept of insurance. After all, it’s probably a word we hear every day – with cartoon meerkats on TV telling us to compare insurance quotes and gossip articles telling us how the next celebrity has insured a body part for millions.
And yet despite our familiarity, many of us don’t like to think about the unexpected happening and remain under-insured as a result. After all, insurance protects us from events such as life-changing illnesses, burglaries, flooding and even death – not things anyone likes to dwell on.
Life insurance covers us for the very worst eventuality – helping our families cope financially when we are no longer here. Often the trigger for purchasing a policy is when we buy a home with a partner and have to consider what would happen to the mortgage if one person died. Despite this, 2 out of 5 Welsh homeowners with a mortgage don’t currently have any life insurance.
Although life insurance is often associated with a mortgage, it can also be useful for renters to help their families cover everyday living expenses if they died, especially if they are the main income earner. However just 1 in 5 Welsh renters currently has a life policy, and just 3% have income protection (covering the rent and bills if they are unable to work).
Home and contents insurance is often another area where many are underinsured. In Wales, 22% of homes don’t have any contents cover leaving them unprepared for burglaries or risks such as flooding or fires. Even those with insurance may find that the small print in their policies means that they aren’t fully covered. In one study, half were unsure if the information they had provided to their insurer was correct and 40% weren’t sure if it covered their technology or jewelry. The result is that 6% of people have been declined a claim in the past 3 years due to not having the correct cover.
If you have any questions about insurance and whether you have the right level of cover, get in contact with one of our mortgage or financial advisers who will be able to help. Initial consultations are always free with no-obligation to accept any recommendations.