It's hardly surprising that consumers are sceptical about insurance protection in the wake of the long-running payment protection insurance (PPI) mis-selling saga.
The problem is there is now a lack of trust in protection products – and, sadly, people who could safeguard their financial future with this back- up won't even give it a second glance.
Even though billions of pounds of compensation has been paid out by lenders, the image of protection cover in its various guises remains in shreds.The UK economy is still a long way from getting back on track, and further painful and unavoidable cuts are still in the pipeline. People need to consider how this could affect their employment situation, and in such times of economic uncertainty shouldn't be tarring all insurance plans with the dirty PPI brush.
The new breed of short-term income protection policies and lifestyle protector products are virtually unrecognisable from the much-maligned old-style cover. With PPI, you had to pay the full premium up front, it was added to your loan and you were charged interest on top. If you repaid your loan or cancelled your policy early, you lost out financially as the refund wasn't made on a pro-rata basis.
Lifestyle protector insurance on the other hand offers far more flexibility and choice for someone looking to protect their family finances, including the opportunity to tailor the cover so you only pay for what you need.
You can choose to protect a set monthly amount (not just loan or mortgage commitments), in most cases up to a maximum of 60 per cent of your gross monthly income. You select whether you require protection against sickness, unemployment or both and you also can choose how long you want to wait before the policy pays out. The longer you choose to wait, the cheaper the cover becomes.
Premiums are payable monthly, but unlike PPI of old you are able to cancel at any time without any financial penalty. Insurance providers have a battle on their hands trying to win over the protection doubters.
The PPI scandal and subsequent actions of the claims vultures have left a bad taste, but it's important that people understand the new-style cover is not more of the same but something that will protect their family without costing the Earth.
Ask yourself, "If I was unable to work for the next six months, could I continue to pay the household bills?" If the answer is no, then income protection could prove to be a financial lifesaver and warrants a closer look.
Look beyond zero per cent for credit-card value
Balance transfers fixed at zero per cent means good all-round credit cards get overlooked. The balance transfer segment of the credit card market still gets the most high-profile coverage and dominates the best buys, but means more suitable, good-value long-term alternatives are being missed.
If you're looking for a new credit card, all the adverts and newspaper best buys will point you towards the longest zero per cent deals on the market. While interest-free plastic can save you a small fortune if used wisely, there are also some very solid all-round credit cards that rarely get a mention because of the blinkered and obsessive focus on the zero per cent balance transfer sector. You can easily get terms of two years or more on free credit on balance transfers, but the go-to rate when the introductory deal finishes is often 18 per cent to 20 per cent APR, far higher than some of the "all-rounder" cards mentioned below.
If you take advantage of the zero per cent period and then move on to another card and repeat the process, that makes financial sense, but if you're looking for a card to remain in your wallet for the longer term there are some alternative options with a wider range of attributes and benefits and a much lower interest rate.
The Halifax Clarity card, MBNA Everyday card and Nationwide BS Select card all charge just 12.9 per cent APR, some 5 per cent less than the market average. They won't appear at the top of the best buys, but when you weigh up the sum of the component parts these credit cards offer much better long- term value.
These cards also offer benefits you won't find on a specialist zero per cent card, but if you were to rely on the information in many of the so-called best buy tables, many people wouldn't even realise these value-added cards existed.
Andrew Hagger is an independent personal finance analyst from www.moneycomms.co.uk