Protection arrangements are a very important part of your finances.

There’s no question that most of us want to protect the things that are important to us – our families, our homes, our quality of life. How well they’re protected largely depends on how much money we have available in an emergency.

Insurance is one of the easiest and most common ways to protect your assets.

For example, if you or your partner were to die or suffer a serious illness, you might have three sources of money:

  • accessible savings from your instant access accounts
  • long term savings you could access in the case of an emergency. However care needs to be taken with penalties for withdrawing investments or fixed term accounts
  • insurance payouts from policies you’d taken out in case of the event

Knowing you have these financial plans in place means you can get on with your life with peace of mind.

As with all insurance policies, conditions and exclusions will apply.

  • Fixed term life insurance pays a sum to your family if you die within a fixed term. For example, you might choose to insure yourself until your children are grown up.
  • Whole of life insurance pays out a sum on your death, no matter when that is. Because it is certain to pay out at some point, you’ll generally get a much lower sum assured for the same premium, than you would with fixed term insurance.
  • Serious or critical illness cover insures you against a range of illnesses and injuries. It’s very important to check what is covered by the particular policy – for example, it may include some cancers, but not others.
  • Income protection insurance pays you part of your income if you can’t work. It usually pays out for almost any injury or illness, but not if you lose your job.

With all types of insurance, it’s very important to know exactly what is and isn’t covered. Of course, the more cover, the higher your premiums will generally be.