How Insurance Protects Your Family And Home

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Life can have unexpected twists and turns, which is why many people opt to take out insurance policies. There are many different types of insurance that cover many different facets of life. Below are some examples of the varying kinds of insurance coverage policies that exist, and the benefits they can offer you and your family. 

Health Insurance 

Even in countries with good public health care, many choose to take out private health insurance to avoid the wait times in the public system, and receive a wider choice of care. If you take out private health insurance, you can select from a range of different cover options based on what you can afford and the level of cover you wish to have. Private health covers dental, something that those using the public health system will need to pay for out of pocket, and also allows you to select your surgeon or doctor, and have a private hospital room. 

Life Insurance 

Life insurance’s purpose is twofold: to help your family through financial setbacks related to your death, and to assist you if you are unable to work. People who are the primary earners in a family, people who have large debts, and those with children have the most to gain from taking out life insurance. If you have taken out a life insurance policy, your family will receive a lump-sum payment upon your death to cover various expenses such as the cost of a funeral and mortgage payments. 

Home Insurance 

Home insurance refers to a policy you can take out to protect your home against damage from events such as bushfires, storms, and floods. People often combine their home insurance with contents insurance, into a single policy. 

The two most common types of home insurance are total replacement cover and sum insured cover. Total replacement cover compensates the policy holder to rebuild the home and return it to the same standard it was at prior to the event. These policies have a lower risk of underinsurance, however not all insurers offer total replacement cover as an option. Sum insured cover entitles the policy holder to a predetermined amount of compensation, selected by the homeowner, to repair or rebuild their home. 

Mortgage Insurance 

There are two subsets of mortgage insurance, and they are often easily confused. The first is lender’s mortgage insurance which exists to protect the lender in cases where the mortgage is deemed high-risk. Most lenders deem a mortgage with a deposit under 20% risky, and require the borrower to take out lender’s mortgage insurance to proceed with the loan process. If you are looking to buy a property and wish to calculate how much lender’s mortgage insurance you will be looking to pay, there are a number of free calculator tools online, provided by the likes of Lendi, Drewberry, HSH etc. 

Unlink Mortgage Insurance which exists to protect the lender, mortgage protection insurance exists to protect the borrower. Mortgage protection insurance is optional, but has several benefits such as assisting paying off your home loan if you pass away, covering monthly mortgage repayments for a set period of time if you are unable to work due to serious injury or illness, and covering your mortgage for a set period of time if you begin involuntarily unemployment. 

Home Buyers Insurance 

There are many reasons to buy a new property. Example, If you decide it is time to take another step in the house property ladder. Most people will move 2 or 3 times in their lifetime. When you do find that ideal property that is within your budget, and you reach and agreed sale price with the vendor, you need to invest in due diligence with house surveys and solicitor fees. Unfortunately it is not uncommon for the vendor to charge their mind in these final stages, leaving you with a broken sale promise and out of pocket. It is now possible to take out home buyers' protection  insurance that will cover your expenses. Check out our guide on how home buyer's protection insurance works to recoup losses incurred in the purchase process.

Car Insurance 

Generally speaking, there are four types of car insurance: comprehensive insurance, third party property insurance, third party property, fire and theft insurance, and compulsory third party. 

Compulsory third party insurance covers you against the death and injury of others if you are involved in an accident. This level of insurance does not cover against damage to another person’s property. 

Third party property covers the repair or replacement of other people's vehicles if you are at fault (but does not cover the cost to repair or replace your own vehicle if you are at fault). Depending on the policy, it may also cover you against the loss of damage of your vehicle in the case of an accident caused by an uninsured vehicle (with variable conditions depending on the insurance company). Third party property, fire and theft covers third party property does, in addition to also insuring against damage to your vehicle from theft or fire. 

Comprehensive, as the name suggests, covers both the repair or replacement of your car and the car of others if you are found to be at fault in an accident. You must first pay an excess, but once that is covered, the company you have the policy with will cover the remaining damage (provided it doesn’t exceed the stipulated limits in the policy). 

Pet Insurance 

We all love our pets, but owning an animal can be expensive. Pet insurance can assist you in covering veterinary costs if your furry friend gets sick or injured. Although pet insurance is often only available for dogs and cats, some insurers offer cover for other animals, so it is worth inquiring. There are three main kinds of pet insurance, these are – accident only, accident and illness, and comprehensive cover. 

While these names are pretty self-explanatory, it is important to note that some policies do not cover for all accidents (such as tick and flea bites), and pre-existing conditions are often not covered under illness in healthcare. That is why you should do an extensive research in order to find the best pet insurance that will meet your every need.

I hope you enjoyed this article about how insurance can help to protect your family and home from potential financial distress.

Interested in more articles about insurance coverage?

Read My Related Posts:

- Is Catastrophic Health Insurance A Smart Option For You?

- Why You Should Get Life Insurance At A Young Age

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