General Protection Insurance

What is General Protection Insurance?

The insurance industry is full of jargon, so the following are some commonly used terms to describe the types of general protection insurance products that are available.

Whilst the Financial Services Authority (FSA) distinguish the various general protection insurance policies available between Pure Protection and General Insurance, the definitions used here are as those determined by the CII (Chartered Insurance Institute).

General Protection Insurance is a way of mitigating or reducing the financial effects of an adverse life event relating to you, your partner’s or family’s health or employment, or in the case of home building and contents insurance to provide for replacement or repair of household property or goods. 

Adverse life events covered by general protection insurance are typically short term (annual) contracts to provide protection from accident and sickness, or illness and disability and unemployment or loss or damage of household property or goods. It can also cover private medical expenses and dental expenses.

Death is a terminal life event covered by Life Assurance policies such as Term Assurance and Whole of Life policies.

Depending on the type of general protection insurance policy taken out by you or on your behalf, a payment will be made either as a lump sum or regular payments to the beneficiaries of the policy in the event of a claim being made.

What are the types of General Protection Insurance?

The following are the types of general protection insurance available:-

·        Mortgage Payment Protection Insurance (MPPI) pays out a monthly benefit in event of accident, sickness and unemployment preventing you from earning. The monthly benefit is designed to pay the monthly mortgage payments.

·        Accident, Sickness and Unemployment (ASU) pays out a monthly or weekly benefit in the event of accident, sickness and unemployment preventing you from earning. The monthly benefit is designed to provide an income.

·        Personal Accident and Sickness Insurance (PAS) pays out a regular benefit or lump sum in event of accident or sickness preventing you from earning.

·        Private Medical Insurance (PMI) provides funds to pay for the costs of private medical treatment in the event of you suffering from an acute condition. The purpose of PMI is to provide speedy treatment for a curable medical condition.

·        Home Building and Contents Insurance (B&C) provides a lump sum in the event of your property or its contents being damaged or destroyed.

Why should I take out General Protection Insurance?

There are a number of factors about an individual’s personal circumstances that will determine which of the types of general protection insurance that may be applicable are based on their suitability and affordability.

However there are currently a limited number of state benefits and allowances that are also available that must be considered before entering into an insurance contract.

How should I take out General Protection Insurance?

The first and most important step after you have decided you may have a need for general protection insurance cover is to have a discussion with us to provide you with independent financial advice.

Once we have agreed what the most suitable type of health insurance cover is for your particular circumstances we make an application on your behalf to take out a protection policy based on how much you can afford and the amount of cover required, for a length of time to match your needs.

Want to know more?

Talk to one of our qualified financial advisers on 01553 777600 or e-mail us at enquiries@ringassociates.co.uk

Also you may want to read the articles by accessing the following Association of

British Insurers website http://www.abi.org.uk/BookShop/ResearchReports/Payment_Protection_Guide.pdf

and the Directgov website at

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/Insurance/DG_10034587

and the Financial Service Authority (FSA) consumer guide available on their website at http://www.moneymadeclear.fsa.gov.uk/products/insurance/types_of_insurance.html