Cutting down on your personal cover is often the easy option when trying to lower outgoings, however many of these products are designed to provide help to you in times of need.
A customer survey, undertaken for AEIS, has shown that many of us will reduce our insurance cover to save money. 27 per cent of the consumers surveyed, planned to reduce their medical insurance and 17% were considering reduceing pet insurance.
The chairman of AIS, says that it is worrying when consumers cancel the very policies that offer protection.
Tony Solomon, concurs 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. life insurance cover and critical illness insurance are both too important to sacrifice. If the worst happened and you died, or fall seriously ill, then cancelling your cover could leave your family with nowhere to live, he says.
If you cannot afford your premiums you must talk to you insurer.
The BIBA, says that people do not appreciate what is involved in replacing possessions, if they are stolen. He advises everyone to take out home insurance, but to look at the different levels of cover, as they may not need all your possessions covered. For example, contents insurance costs about 149 pounds a year on average, you can reduce this by 25% by canceling the extra options.
Pet insurance may appear to be unnecessary, but without cover you may struggle to be able to afford the vet bills. 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, if this is not the case, it is of the utmost importance that you protect the future of your family financially. Therefore, it would be advisable to choose critical illness cover, which pays out a lump sum, rather than mortgage protection or medical insurance.