Insurance is essential - paying for insurance provides protection against the unexpected and a guarantee of compensation for loss, damage, illness or death.
There are several different types of insurance available, all with different purposes, including building, life, travel, vehicle, and household content insurance. Here, Bowsers Solicitors will break down exactly why you need both building and life insurance, in particular.
Building insurance covers the repair costs of any structural damage that occurs to your home, including damage to pipes, drains, cables, garages, fences or sheds. When planning to buy a property with a mortgage, building insurance is essential. Without building insurance, you may be denied a mortgage and disrupt the conveyancing process. Your chosen insurance should cover at least the mortgage amount but preferably the full cost of rebuilding your house, including loss caused by extreme weather, fire, fallen trees or vehicles. This amount will likely be less than your house's market value.
Even if you don’t currently have a mortgage, it is vital to insure your property - it’s important to consider how you would afford to repair your home if it suffered any damage. Your building insurance acts as a safety net, in case the worst happens.
Life insurance, although a difficult topic, is also important to consider, as it offers financial support and protection to your loved ones after your death. For example, if you pass away before your mortgage is repaid, that financial responsibility is usually passed to your loved ones. Life insurance covers this - it can help you ensure your family and those you care for are able to pay the outstanding mortgage. Over-50s plans can cover the cost of funerals too. You can do this by making regular, small contributions, which pay-out upon your death. Because these plans have a lower pay-out than traditional life insurance, this type of cover is usually inexpensive.
Another reason you may consider taking out a life insurance plan is if you have recently become engaged or married. Life insurance allows you to make financial contributions to your spouse after your death. Similar policies can cover your children or dependents, so you can protect the next generation financially if the unexpected happens. If you plan on leaving money behind for your family, it may be worth considering life insurance that covers inheritance tax, so your loved ones can receive the full amount you intended them to have.
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