We’re guessing you’re here because you’ve been wondering how you would manage if you or your partner became ill or injured, and were unable to work for a while. It’s an important thing to think about, especially if you’re paying a mortgage, loan or other debts or have children to support.
You might even have savings set aside, but you’re worried that these would disappear quickly when they are used to pay for your monthly outgoings, food shopping and transport costs.
There is a way you can protect your family against this. It’s called accident, sickness and unemployment insurance. It’s not be confused with health insurance, which covers the cost of private medical care.
How insurance protects you
Here’s how it works. If you have bought accident, sickness and unemployment insurance and you are unable to work because of a prolonged illness, disability or you lose your job, you will receive a payout. Usually there is a ‘waiting period’ between when you become unable to work and when the insurance begins to pay out. You agree this as part of the initial policy terms.
If you’re thinking about buying a policy and what level of cover you would need, think about whether you just need to cover your mortgage, loan or debt repayments or whether you might need to cover your salary as well.
If you work for an employer, you might already have some cover against accidents and illness, and you could look into what you would be due if you were made redundant. If you’re self-employed you won’t have this kind of back-up, so this type of policy might be very useful to you.
The good news is that it’s easy to compare the different levels of cover and prices with comparethemarket.com. Just start a quote by filling in your details and what you need to cover. It only takes a minute or two. We will ask whether you specifically want to cover yourself for loan repayments, a mortgage, your rent or your overall income.
You’ll then see a page listing all the quotes in price order, with the cheapest at the top. There are also different tabs you can select to view the different kinds of cover and how much they would cost. For example, you could also look at unemployment-only cover.
Make sure you look at all the details of the policy, not just the price, as they will be slightly different in what they do and don’t cover, the waiting period and other features. You can also call to speak to an expert if you have any queries.
Once you have chosen the right cover for you, click to go to the providers' website and buy the policy. Again make sure you read all the details.
Do you need life insurance?
Many people that buy this kind of insurance also buy life insurance, which provides a large sum of money to your partner and/or children if you were to die. A lot of people buy life cover to potentially pay off the mortgage, so that their family won’t have the worry of paying for their home when the insured person isn’t around. The funds could also be used for funeral costs or to get rid of any outstanding debts.
There are a few life events that often make people think about buying a life policy. Buying a home is one of these, as the insurance could mean that your partner or family could inherit a mortgage free home. Another is getting married or settling down with a partner. A third is starting a family. When there are important people in your life, it’s natural to think about what they would need if you weren’t around to provide for them.
So it can be a pretty important cover to have in place and could mean a great deal to the people left behind if you were to die.
Comparing life insurance quotes
With comparethemarket.com it’s easy to compare life insurance. It only takes on average three minutes (we’ve timed it!) to get to a list of life insurance quotes tailored to you.
First you need to decide whether you want to look at single cover or joint life insurance. With joint cover you may pay a little more, but the insurance will pay out upon the death of either of the insured people on the policy. However, this type of policy would end once it pays out, so the remaining person would need a new policy.
Next you need to set a time limit on the cover – enter the number of years you want it to last. This might match up with the amount of time left on your mortgage, or when your children are likely to be independent and no longer need your financial support.
Then you just need to tell us whether you have smoked or used anything containing nicotine in the last 12 months. Because of the health risks linked with smoking, providers usually charge more to cover people that smoke.
Next you’ll see a page with every life insurance quote from the providers that can cover you, listed in price order with the cheapest life insurance at the top. Remember, cheap life insurance isn’t necessarily the best life insurance for you, so do read the details carefully before you buy.