Insurance. Duplicated Insurance Wastes Money.
Below is a MRR and PLR article in category Finance -> subcategory Insurance.
Avoiding Duplicate Insurance: A Simple Way to Save Money
Have you ever calculated your total spending on insurance? If not, you might be surprised by how much it adds up to. Even more surprising is the likelihood that you’re paying for duplicate coverage. By eliminating these overlaps, you can save a significant amount of money.
Many people unknowingly have coverage for legal expenses, income loss, theft, and even death. This often happens because we don’t fully understand our insurance policies, especially if they were arranged by brokers or financial advisers.
Understanding Your Coverage
A survey by the Financial Services Authority (FSA) found that extras like breakdown recovery and legal expense coverage are often added to car insurance policies without checking if the policyholder is already covered elsewhere. Similarly, many people with Permanent Medical Insurance (PMI) find they don’t need additional payment protection policies. If you claim on a PMI, having payment protection can reduce the payout, making it redundant.
The Financial Ombudsman stated that people frequently discover they are over-insured only when they attempt to make a claim. At that point, they realize their policy offers little to no added benefit.
A Real-Life Example
Consider Amanda Lariviere from West Yorkshire. At 42, she was recovering from ovarian cancer and couldn’t work due to an allergic reaction to chemotherapy. Faced with an unexpected tax bill, she visited her building society to discuss re-mortgaging her home. Her adviser requested her life insurance policies to support her application. Much to Amanda’s surprise, her policies with Norwich Union and Scottish Provident, which she thought were life insurance, turned out to be critical illness policies worth £100,000. This amount allowed her to cover her mortgage and the tax bill.
Common Insurance Policies to Review
Critical Illness Insurance
Often bundled with life insurance as an optional extra, critical illness insurance can sometimes be included in employment packages. It’s worth checking with your employer if you have this benefit.Life Insurance
Life insurance can also be provided by employers through pension schemes, known as death-in-service benefits. These typically pay out a tax-free lump sum of three to four times the annual salary if the employee dies while working for the company.Permanent Medical Insurance (PMI) vs. Payment Protection Insurance
PMI, also known as Income Protection Insurance, pays a monthly sum if you can’t work due to illness. It can cover an extensive range of conditions and sometimes includes redundancy protection. PMI can render payment protection insurance unnecessary, as most policies don’t allow claims for the same event from multiple insurances.Mobile Phone Insurance
Mobile phone insurance often comes with high deductibles, usually not less than £50. You might save money by opting for a pay-as-you-go plan instead.Legal Expense Insurance
Legal expenses relating to home disputes are typically included in home and contents insurance. Car insurance often provides legal expense cover as an optional extra or standard feature. Check if trade unions or professional associations offer this service before paying for additional coverage.ID Theft Insurance
According to consumer magazine "Which?", the legal liability in case of identity theft is capped at the first £50. Some banks, like mine, offer ID theft insurance for free, making additional coverage less necessary.Credit Card Purchase Protection
Many credit cards automatically insure your purchases for a specific period after purchase. For instance, Barclaycard protects items valued between £50 and £2,000 against theft and accidental damage for 60 days.By taking the time to review and understand your insurance policies, you can avoid unnecessary duplication and ensure that you’re only paying for the coverage you truly need.
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