Credit Crunch
Credit crunch is like having less water to satisfy your thirst. You need a bucket of water and all you get is a bowl of water. During this period, it becomes more difficult to obtain a loan and when you get one, you may have to pay more interest.
How does this affect the very essential Personal Insurance?
We will examine the effect of the credit crunch on three major types of Insurance policies:
Life Insurance
In as much as some people have made moves to drop or put a hold on their insurance policies, a large number of people are also making moves to cut down on many daily expenses in order to keep their insurance policies intact.
According to the InsuranceDaily.co.uk, stock market analysis shows that insurers among other financial companies received the hardest hit within the last three consecutive quarters.
However, some market research shows that people are willing to do away with non-essential services and products so they can continue to enjoy their life protection through life insurance policies. According to the research, only one in ten are willing to give up their life insurance policies due to a tighter personal budget. Many people rightly see life insurance as a very important policy.
Home Insurance
OnlyInsurance.com revealed in an article that over 19 million people have reduced their financial security by cutting their insurance covers. Some homeowners have put a stop on their pensions and their insurance contributions. Even then, less people have cancelled or are cancelling their home insurance policies as well as their mortgage protection payments. This is an indication that people are aware of the importance of these policies and the long term negative impact cutting down of their policies may have on them.
Car Insurance
In the UK, the credit crunch is causing more people to change their providers in order to cut down on cost. It is very obvious that car insurance is very essential for car owners. So what can be done at this time? If you search through the Internet and insurance websites, you will surely find ways of cutting down on your car insurance policy depending on your circumstances.
The question you should ask yourself is:
What are the implications of stopping my insurance policy? What are the advantages and the disadvantages involved?
Before dropping an existing policy, ask yourself – is it possible that you are duplicating your polices; maybe sickness protection or income protection? You can check your work benefits to see what you are entitled to.
What else can be done?
Many insurance provider websites have money saving tips and advice as well as the opportunity for you to compare insurance quotes and policies. These will help you to make logical decisions that will be of benefit to you and your family.
In conclusion, the importance of an insurance policy can not be overemphasised. Many policy holders and future policy holders find themselves in rocky circumstances due to the current prevalent credit crunch, however, it is important to take a look at the pros and cons of dropping existing policies or deciding against taking out new insurance policies when the need arise.
Lola Adegbulu has been involved in Internet study and information distribution for over five years. Find out more and get tons of free quality, useful and downloadable software and e-books at www.pricelessway.com. For more Insurance info go to www.insurance.pricelessway.com