Managing personal finance Deck 2 Flashcards
What is insurance
Way of protecting yourself from financial loss or securing compensation for unexpected events(requires person to pay premiums)
Features of car insurance
Fully comprehensive or 3rd party
May include extras e.g breakdown recovery
Cheaper options with conditions
Advantages of car insurance
Legal requirement
May pay for repairs to own car and 3rd party
Reduced premiums for safer drivers
Disadvantages of Car insurance
Premiums can be high for high risk groups e.g old or young drivers
Excesses often apply
Features of home and contents insurance
Protects building/contents
May include additional covers e.g emergency plumbing
New items for old items
Advantages of home and contents insurance
Covers items when outside the home
Avoids repayment of damaged/stolen items
Disadvantages of home and contents insurance
Excesses often apply
Can be compulsory for some mortgages
Features of life assurance
Small regular payments made in the event of death
Advantages of life assurance
Reduces financial worries after someone dies
Disadvantages of life assurance
Some policies arent index linked with leads to a fall of payment value in terms of spending power
Features of life insurance
Large sum paid in the event of death
Advantages of life insurance
Meets compulsory requirements of some mortgages
Reduces financial worries
Disadvantages of life insurance
Money is gone once spent
May need to be used to pay off a mortgage
Features of travel insurance
Medical expenses paid when abroad
Holiday cancellation costs covered
Lost baggage compensated for
Advantages of travel insurance
Costs of a body being brought home are covered
Medical expenses covered
Refunds can be claimed if financially out of pocket
