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Reasons to Invest in Insurance - Even During a Recession

Recent research from the Association of British Insurers (ABI), the industry body for the insurance sector, showed that a quarter of UK people had cancelled or not renewed their insurance policy in order to save some money. Other insurances are also being slashed, such as life insurance. Reassuringly, though, private health insurance has seen an upturn.

Experts are warning that cutting back on insurance to save money could be a “false economy”.

Expect the unexpected - stay insured

In the ABI survey, the biggest worry for people, especially women (53%) was how they would cope if something unexpected such as a burglary happened. By investing in insurance, you are so much more prepared for what life can throw at you sometimes.

Stephen Haddrill, the ABI’s Director General, commented: “The insurance market remains very competitive, so shopping around can help you get a good deal, while ensuring that you are not at the mercy of the unexpected. Ditching insurance or reducing your cover must only be a last resort.”

Financial stability

Having insurance and investing in health insurance can actually offer you financial stability, and save you more money in the long-term than ditching it altogether would save you in the short-term. Insurance allows you to pay manageable regular amounts, rather than having to find what could be a large lump sum of money, should something unexpected happen. Investing in insurance, such as contents, building and health insurance could help keep you debt-free and financially stable.

Stephen Haddril added: “Cutting back on insurance protection is a false economy. In these uncertain times, insurance provides a vital financial safety net to steer individuals, and families through the recession, as well as helping to provide long-term security.”

Private health insurance

Despite the ABI survey revealing insurance cutbacks in areas such as contents, building and life insurance, between 2007 and 2008, the ABI revealed that there was a 2.7% increase in the number of people covered by health insurance.

This could be due to growing impatience with NHS waiting times and worries about superbugs such as MRSA. In a separate survey recently, hospital cleanliness was listed as the top reason that many people choose to take out private health insurance.

ABI director general Nick Starling said corporate private health insurance makes good sense for companies and employees. “Private medical/health insurance is good for companies and the economy because it enables employees to get back to work after illness or injury as quickly as possible,” he said.

If you’re looking to save money or cut back because of the recession, think twice before cutting back on insurance such as buildings, contents and health insurance. Insurance is an investment which can save you money, help you remain financially stable and give you peace of mind.

Before you ask yourself whether you can afford to invest in insurance, ask whether you can afford not to.

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