We need insurance because the unexpected sometimes happens. If you are burgled, insurance can pay for you to replace the things that were taken. If you need medical treatment, it can pay for private health care, and replace some of your income if you can not work. If you die, insurance can pay a lump sum to the family you leave behind.

There are lots of different types of insurance available and it can be confusing. You can get insurance for just about anything these days. Therefore, it is difficult to decide what to buy or where to buy it from, but you think about your needs and ask the right questions. Here is more information on some of the more common types and why you might need them.


Pure Protection and General Insurance: Pure protection insurance includes term assurance (life insurance), critical illness insurance; income protection insurance; and payment protection insurance, which includes elements of pure protection and general insurance. General insurance includes motor insurance; household insurance; travel insurance; health cover; and pet insurance.

The Financial Services Authority (FSA) regulates sales of most insurance products. However, their selling rules do not currently cover the sale of extended warranties on non-motor goods (such as on electrical goods) where the person selling the insurance is also providing the goods. Even where their rules do not cover the sale of a policy, they do cover the insurance company providing the policy, providing they are based in the UK and regulated by FSA.

You do not have to take out most insurance, but for peace of mind you may wish to consider some. Firms selling insurance and those providing insurance cover (underwriting the risk) have to be regulated by FSA, or be the agent of a regulated firm. Regulated firms and their agents are put on our Register and have to meet certain standards. Always make sure that the firm you use is on FSA Register before handing over your money. If they are not regulated by FSA and things go wrong, you will not have access to complaints and compensation procedures.


You can buy insurance directly from insurers over the phone, internet or by mail, but you can also buy insurance from other types of firms such as banks, building societies, insurance brokers, financial advisers, mortgage brokers, or supermarkets. Insurance differs in what it covers and what it excludes. Read the key policy information that the insurance company will give you to find out exactly what you are getting and use it to shop around and compare other policies.

Whatever type of insurance you decide to take out, always ensure the firm is authorized by FSA to sell insurance. Disclose the full facts when applying for insurance. If you do not, you could invalidate your policy and the insurance company will not pay out in the event of a claim. Read the key policy information for exclusions to ensure that you choose the right policy for you. Also, check for excess charges. Some policies make you pay a certain ‘excess’ amount before they pay out on claims, and some policies charge an excess per clause rather than one overall. Above all, shop around using these documents to ensure you get the best deal for you. Remember that some policies might be cheaper than others, but they may not offer the same level of protection.