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Insurance Duplicated Insurance Wastes Money
ave you ever worked out policyholder was already covered.
how much you spend on It's also not uncommon to find
insurance? Try totting up that people with Permanent
your premiums – we suspect you'll Medical Insurance have duplicated
be surprised! You'll be even more their cover via payment
surprised to discover that protection policies taken out
there's a probability that you've specifically to cover their
also duplicated some of the cover monthly payments on mortgages,
you're paying for. Cut the loans and credit cards. The point
duplication out and you're is that if they claim on their
certain to save money. Permanent Medical Insurance,
their payout will be reduced
Lots of people have insurance because part of their claim is
cover for legal expenses, loss of also insured through their
income, theft, even death, payment protection policies – so
without even realising it. This their payment protection
can arise because many of us insurance is really a waste of
don't fully understand what's money.
covered by the policies we have,
especially if the policies had The Financial Ombudsman has
been arranged for us by financial confirmed this saying, “People
advisers and brokers. often contact us when they find
themselves over-insured. They
In a recent survey, The Financial often do not realise until they
Services Authority (FSA) make a claim that they have been
discovered that optional extras paying for a policy that provides
such as breakdown recovery and very little, if any, benefit”.
legal expense cover, were
frequently added to car insurance There's also ample of evidence
without checking whether the that some of us simply don't
understand what we're actually sufficient to pay off most of her
insured for! For example, take mortgage and her tax bill!
the case of Amanda Lariviere from
West Yorkshire. Amanda, aged 42 Here's some typical insurance
and mother of two, is recovering policies to check out.
from ovarian cancer and had an
allergic reaction to chemotherapy Critical Illness Insurance
which kept her off work. Out of
the blue she received an Critical Illness insurance is
unwelcome tax bill so she decided often sold as an optional extra
to visit her building society to within a life insurance policy.
find out if she could raise some In fact that's usually the
cash by re-mortgaging. The cheapest way to buy it. However,
adviser at the Society wisely some enlightened employers
asked her to bring with her, her already provide critical illness
life insurance policies so that insurance as part of their
they could be used to support her employment package. Ask your
re-mortgage application. So employer if you are one of the
imagine Amanda's surprise and lucky ones!
delight when the adviser
explained that her policies with Life Insurance
Norwich Union and Scottish
Provident, which had been costing Some employers also provide life
her £80 per month, were not life insurance cover within their
insurance policies at all – they pension schemes. It's called
were actually critical illness death-in-service benefit and
policies with a combined insured typically pays out a tax-free
value of £100,000. She was able lump sum worth 3 to 4 times the
to claim on these policies and annual salary if the employee
the £100,000 she received was were to die whilst employed by
the company. out! (All the others will reduce
their payouts to the value of the
Permanent Medical Insurance and money you are receiving from your
Payment Protection Insurance other policies)
Permanent Medical Insurance (PMI) Mobile Phone Insurance Normally
is also known by some people as mobile phone policies have a
Income Protection Insurance. PMI hefty excess – rarely less than
pays out the insured monthly sum £50. You could be better saving
if the policyholder is off work the insurance and changing to a
due to illness due to one of a pay-as-you-go plan.
wide range of specified illnesses
- and some policies will even pay Legal Expense Insurance
out during redundancy. PMI
policies pay out indefinitely or Insurance for legal expenses
at least until the policy comes relating to disputes concerning
to the end of its insured term. your home will usually be
included free of charge within
Few appreciate is that PMI your home and contents insurance
actually eliminates the need for policy. Most car insurance
Payment Protection insurance – policies provide legal expense
the sort of insurance frequently cover as an optional extra –
sold alongside loans, credit others even include it as
cards and mortgages to maintain standard. Some trade unions and
monthly payments if you are off professional associations
sick, have an accident or are sometimes include access to legal
made redundant. Indeed, you can't advice as part of their service
make a claim against more than to their members. Check these out
one policy for the same event – before you pay for more cover!
only one policy will agree to pay
Insurance for ID Theft According automatically insure your
to “Which”, the consumer purchases for a set period of
magazine, you are only legally time after you've shopped.
responsible for the first £50 if Barclaycard is a good example. If
your identity is stolen. Is it you used Barclaycard to buy
worth insuring for a £50 risk? something valued between £50 and
Incidentally, my bank has just £2,000, you're insured against
given me this insurance for free! theft and accidental damage for
the next 60 days.
Automatic cover for credit card
purchases Many credit cards
About the Author:
Michael is the expert financial editor for Scrouge Online who specialise in Life Insurance and Home Insurance
Read more articles by: Michael Challiner
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