Read our jargon buster guide to find out about the most common types of insurance, what they’re for and some of the confusing terms you might come across.
With so many insurance products out there, designed to protect you from lots of different things, it’s sometimes hard to work out which ones are the most suitable for you. From life, critical illness and income protection, to pet, car, home and even wedding insurance, there are policies for people in all kinds of situations.
While it’s unlikely all of them will be relevant for you, it’s worth getting clued up on the different types of insurance so you can work out what you might need and make sure you’re protected should something happen.
Common types of insurance
Find out about some of the most common types of insurance and what they’re for. There are many insurance products and you may need, or already have, a number of policies depending on your situation. For more help and guidance on insurance, visit the Money Advice Service website.
Please remember that all insurance policies will have their own terms and conditions. Make sure you read your policy documents and any other information given to you by your provider, or potential provider, to understand what your insurance covers and what it doesn’t, and what to do if you need to make a claim.
|The insurance||What it’s for|
|Buildings insurance||Buildings insurance covers the cost of repairing or rebuilding your home if it’s damaged, for example by a storm, flood, fire, subsidence or lightning. If you own your property and have a mortgage, your lender may require you to have buildings insurance. If you don’t have a mortgage, it’s still a good idea to get cover in case your home is damaged and needs repairing or rebuilding.|
|Business insurance||Business insurance protects you against risks and losses that can happen while carrying out business activities, for example accidents, theft, damage and legal fees. There are lots of different kinds of business insurance, from basic polices for self-employed people to more complex policies for larger companies.|
|Car insurance||Car insurance provides you with financial protection against accidents, vandalism, theft and fire damage, as well as protection if you harm anyone or their property. You are legally required to have this insurance if you own a car, and there are different levels of cover you can choose from.|
|Contents insurance||Contents insurance covers you if your possessions are lost or damaged, for example in the event that your home is burgled or you have a fire or flood. You can also get contents insurance to cover possessions lost or damaged outside your home.|
|Critical illness cover||Critical illness cover provides a lump sum or regular income if you are diagnosed with a specific life-threatening disease such as cancer or a heart condition. Some policies may also cover you if you become permanently disabled following an injury or illness.|
|Dental insurance||Dental insurance covers non-cosmetic dental work such as routine check-ups, accidents and emergencies. The specific treatments available to you will depend on the level of cover your policy offers.|
|Flood insurance||Flood insurance protects you against the costs of things like removing debris, repair or replacement of belongings, alternative accommodation and restoring your property, if you have a flood. It’s normally included as part of a buildings insurance policy, but won’t cover contents unless you also have contents cover.|
|Health cash plan||A health cash plan provides a cash sum if you need medical treatment. It’s unlikely to cover major costs or replace your income for long periods, but it can be useful for dental, podiatry and other minor procedure expenses.|
|Income protection insurance||Income protection insurance offers a regular income for when you’re off sick from work. It’s especially useful for self-employed people, who don’t have statutory or occupational sick pay.|
|Life insurance||Life insurance pays your loved ones or dependants a lump sum or regular payments if you die. It’s particularly important if you have people who depend on you financially.|
|Mobile phone insurance||Mobile phone insurance covers the cost of replacing or repairing your phone if it’s lost, damaged or stolen.|
|Mortgage payment protection insurance||Mortgage payment protection insurance covers your mortgage repayments if you fall ill and have to stop work or are made redundant. There’s usually a waiting period before the insurance pays out (such as three or six months) and policies typically pay out for a maximum of 12 or 24 months.|
|Over 50s life insurance||Over 50s life insurance is generally available for people aged 50 to 85. You pay a fixed amount every month and the policy pays out a lump sum to your loved ones or dependants when you die. This money could be used for things like funeral costs, outstanding debts or as a gift.|
|Payment protection insurance||Payment protection insurance gives you short-term cover for a loan or credit repayment if you’re unable to work because of illness, disability or redundancy.|
|Pet insurance||Pet insurance helps protect you against unexpected costs related to your pet, such as veterinary bills or loss and theft of your pet.|
|Private medical insurance||Private medical insurance pays for some or all of your medical bills if you’re treated privately, and may help you to get treatment faster. The specific treatments (or amount of treatments) available to you will depend on the level of cover your policy offers.|
|Travel insurance||Travel insurance provides you with protection, before or during a trip abroad, against unforeseen events such as a medical emergency, loss of luggage, travel delay, or your travel supplier going out of business. For information on travel insurance in relation to coronavirus, read our article on Covid-19 and your travel plans.|
Wedding insurance covers the cost of your wedding if you need to cancel due to illness, bereavement or extreme weather conditions. There’s also cover for if something goes wrong, such as supplier issues, damage to wedding attire, loss of rings or your wedding photos needing to be retaken.
When your insurance policy has been recommended to you by an independent adviser who has assessed your individual requirements and explained why they think the policy is best for you.
A term sometimes used in place of ‘insurance’, generally when referring to life insurance.
The person(s) chosen by you who will receive the pay out from your insurance if you die.
Insurance market experts that can help you to find the best insurance product for you (often at a cost).
A request for payment under the terms of an insurance policy.
Protection given by an insurance company when it agrees to pay out if a particular event happens.
A type of life insurance policy that's paid over a fixed period of time, where the level of pay-out decreases over the length of the policy.
A person(s) who relies on you for financial support, such as your partner or children.
The agreed amount of money that you pay to your provider towards a claim on an insurance policy. The amount of excess you have on a policy can impact your pay-out.
A type of life insurance policy that covers two people, but when one person on the policy dies, the provider will pay out and the policy ends.
Life insurance where the pay-out amount stays the same over the whole term of the policy.
Where you and your provider agree that you will not pay premiums for a set period of time, but your cover remains the same.
A contract between you (the policyholder) and your insurance provider, which provides details of the claims that the insurer is legally required to pay, along with the terms and conditions of your contract.
When you continue an insurance policy past its term (some policies, such as car insurance, may automatically renew).
The sum of money your insurance provider will pay out.
The amount of time an insurance policy lasts (once that term comes to an end, you are no longer covered).
A type of life insurance that provides cover over a pre-agreed period of time.
Whole of life
A type of life insurance that will pay out when you die, no matter what age you are.
Get more information
If you need more information, whether it’s finding out more about a specific type of insurance, making a claim or resolving a problem, the following websites can help:
- Money Advice Service: for general guidance on insurance and getting the right cover for you.
- Which?: for information and guides on common types of insurance.
- Citizens Advice: for help if you have a problem with an insurance policy.
- Financial Ombudsman: for guidance on how to complain about an insurance company or claim.
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