Melanie Bien: Why cover all angles? Just insure acute ones

The big "C" strikes terror into the hearts of those whose lives it touches. Sadly, that's way too many of us: one in four people develop cancer at some point.

The big "C" strikes terror into the hearts of those whose lives it touches. Sadly, that's way too many of us: one in four people develop cancer at some point.

In the past week, my uncle has been diagnosed with prostate cancer. Meanwhile, the mother and father of one of my closest friends are being treated, respectively, for ovarian and prostate cancer. Instead of a cure getting closer, it seems this disease is as destructive as ever.

One way of easing the trauma, although by no means eliminating it, is to have financial protection. My uncle and my friend's parents have private medical insurance, so they've been treated sooner than if they had relied on the NHS. But such cover comes at a price and many of us can't afford it.

The problem with any type of insurance is that it's easy to be cynical. It is pricey and premiums seem to be going up all the time, particularly for car insurance. And it gets a bit ridiculous when you could insure pretty much anything if you had the money and inclination to do so. However, it's only when you need to make a claim that you appreciate why cover is important.

We regularly write about insurance in these pages because it plays such a big part in our lives. The number of people who haven't got life cover, motor insurance (it's illegal not to have third-party cover) or a home contents policy is astounding. Cost is the main reason why many Britons eschew cover and argue, while crossing their fingers, that they probably won't need it anyway.

But the unexpected does happen and insurance helps us cope with it. For example, Karen and John Bowes might safely have assumed their farmhouse in the Lake District would never be flooded. After all, as they explain on page 25, that hadn't occurred in more than 100 years. But a flood only has to happen once for it to be devastating. The Boweses are very thankful they paid their building and home contents premiums.

As I renewed my home contents policy last week, the thought did cross my mind that in the three years I have been with my insurer, I haven't made a claim. That's around £600 in premiums I've paid out and what have I got in return? Well, peace of mind - and that's been more than worth it.

There are ways of cutting the cost of insurance but they are all about shopping around for the best price, rather than skimping on cover. Or paying your premiums annually rather than monthly, if you can afford to, as this earns you a discount. Or giving up smoking to get cheaper life insurance premiums, beefing up home security to cut the cost of contents cover, and making sure you don't double up. A lot of people pay twice for insurance by taking out baggage cover as part of their travel policy - when their home contents already protects them.

It isn't always necessary to take out insurance; sometimes there are better options. Instead of buying protection when you take out a personal loan, for example, which almost doubles the cost, put the money you would have paid for it into an instant access account. This can be used to meet the loan repayments if you lose your job, and if you don't, you can build up a nice pot of savings to use as you please. Far better than lining the pockets of your insurer.

Some of the most expensive insurance protects your mortgage repayments, such as accident, sickness and unemployment cover. Lots of people ask me how crucial this is, particularly if you are on a tight budget. The answer is to work out what cover is essential for you and what would be quite nice to have but isn't urgent.

As we discuss on the back page, life insurance is the absolute minimum - unless you are single and have no dependants, in which case you won't need to worry about what will happen to the mortgage payments if you die.

Next, find out what your employer provides. Many offer sick pay, so you may not need to take out your own accident or sickness cover. But remember, if you should lose your job or be invalided out of work, that there is virtually no help available from the state to pay your mortgage.

As the Government tries to shift responsibility for our financial welfare on to us, insurance can't be ignored. But be selective: take the elements you need and dismiss the rest, and don't pay more than you need to for it.

m.bien@independent.co.uk