If heaven can't wait

What if ... you broke a leg/lost your job/went under a bus?

With the general election just around the corner, it is easy to ignore the scaremongering of the spin doctors of the various political parties. Their various "what if ..." propositions are designed to encourage you to vote against, rather than for, a particular party.

Insurance companies know all about such tactics. It is the whole basis of how they sell their services. Theirs is the ultimate "what if ..." industry: what if you lose your job, what if you lose a leg, or, worst of all, what if you die before reaching a ripe old age?

Stripped of all the technicalities, the insurers' sales pitch is simple: "Pay us something now and we'll pay you back much more if - or when - it happens." "It" being what is known in the jargon of the trade as the insured peril - anything from rain spoiling the church fete to your untimely death.

Viewed in this way, many people think of insurance companies as no more than glorified bookies, and many of those who have had to fight them over a claim would say that you should take whatever they say with a generous pinch of salt.

But that common perception of the insurance business does not mean that you should ignore it, since the more you plan for the worst, the easier it will be to cope when it happens.

Protecting their family is a priority for most people - and beyond providing a roof, warmth and food, high on the list must surely come peace of mind.

No one likes talking about death, but it is something that needs to be thought about, and even planned for. Having adequate life assurance is about giving a family a degree of financial security. It can at least ensure that the loss of a breadwinner doesn't lead to hardship for those left behind.

There are various ways to insure your life. The simplest and cheapest is term assurance - because it literally lasts for a given term, say, 25 years. If you die after the agreed term, you will get no benefit from such a policy.

Whole-of-life policies last throughout your life, so your dependants will be guaranteed a pay-out. The guarantee means that the policies are much more expensive.

The third kind of life cover is an endowment. This is an investment plan that includes life cover, and is often used to repay a mortgage. If you die before the end of the term of the policy, your dependants will receive cash; if you survive, you will receive the returns from your investment.

Choosing a policy can be complicated, but there is a simple rule of thumb: the more life assurance you can afford, the better your family will be protected.

You should also prepare for the eventuality of becoming ill or having an accident. Either way you may not be able to work again, and so may be unable to support your family financially.

There are various ways to get a pay-out when sickness strikes, chiefly through permanent health insurance and critical illness insurance, although you can get specific insurance to cover particular costs, such as mortgage payment protection insurance.

Permanent health insurance - often known as income protection insurance, income replacement insurance or disability insurance - provides a regular income if you are unable to work because of an accident or sickness. Its beauty is that it will continue to pay out as long as you are unable to work, even if that means the rest of your working life.

Critical illness insurance is a different type of beast. It pays out a lump sum if you are diagnosed as having a life-threatening disease, such as cancer or heart trouble. In many ways it is similar to life assurance, but the fact that it pays out while you are still alive means that you can use the cash to pay for health care or any modifications to your home that your illness demands.

There are other ways to protect your family. Pets, for instance, are important members of many families and should not be excluded from protection. Insurance that covers the cost of medical treatment for pets has become much more sophisticated in recent years and can be bought at a reasonable price for different kinds of animals.

Finally, you need to think about preparing for the worst. Paying for your funeral before you die will protect your family from having to find the cash and avoid further distress at a difficult timen

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