DIY Wealth Creation

Cutting down on your insurance often seems ideal when trying to cut costs, however many policies are intended to protect you in times of need.

A review, done by The Daily Mail, indicates that many of us are planning to cancel insurance policies to save money. 27 per cent of the consumers surveyed, planned to reduce their medical cover and 17% were considering a reduction in pet cover.

The CEO of AIS, says that it is a worrying development when consumers cut back on the very policies that ensure their financial stability.
Tony Solomon, concurs with this view, saying do not cancel you policies, because loss of cover may have a damaging affect on their family and themselves in the years to come. term life insurance and critical life insurance are both too important to sacrifice. If the worst happened and you died, or fall critically ill, then cancelling your cover could leave your family with without hope, he says.

You are advised to talk to your insurer if you are having difficulty paying your monthly premiums, as they may be able to arrange a tempoary reduction in the amount of cover.

The BIBA, says that people do not appreciate what is involved in replacing possessions, if they are stolen or damaged. He advises everyone to take out contents insurance, but to look at reducing your cover level, as they may not need every single item covered. For example, contents insurance costs about 149 pounds a year on average, but you should be able to save 25% by cancelling accidental damage and personal possessions cover.

Pet insurance may appear to be unnecessary, but without cover you may struggle to cover the vet bills. So which policies are you safe to cancel? Referring to medical cover, Solomon says that many people have medical insurance with their employment. However, you must protect your families finances. Therefore, it would be advisable to choose Critical illness, which pays out a lump sum, rather than mortgage cover or medical insurance.