Is Insurance Worth the Premium you Pay?

Many of us have some form of insurance and more will have more than one type of insurance. However, insurance is expensive and you may wonder whether it is really worth it. From insuring our vehicles to lives, homes, contents, pets, health, loan repayments and individual goods we could end up with a lot of insurance. It can be expensive but not having it is risky.

Weighing up the risk

Insurance will cover us in case of certain circumstances happening. It is the law that we must have car insurance to cover the costs of car repair and injury that we may cause to other drivers but other insurance is optional. We have to decide whether we think that it is worth paying the money for peace of mind and to cover the risks or whether we will risk it and hope things are okay.

For example, we may decide that we have very few valuable possessions and so we are prepared to go without insurance on them as in the very unlikely event of them being stolen or destroyed we feel they would not be that expensive to replace. However, if we have valuable things that we would not be able to replace we might think that it is worth insuring them so that we can replace them if necessary.

Sometimes it is down to cost when more well off people might pay for health insurance because they feel they will get their treatment more quickly and in nicer surroundings whereas most people will just go along with their NHS care and hope that they will be able to get the treatment that they need when they need it.

If we have a pet we might pay for insurance so that they can get treatment if they need it as paying for operations can be extremely expensive. If we have a car we might want fully comprehensive insurance so that if it is damaged we can get it repaired without paying and we may want breakdown cover as well, just in case we need to be towed or get a repair while travelling.

Considering the cost

The cost of the insurance is a big factor for many people. There are some insurances that they may have to have, such as car insurance or life insurance with a mortgage, but usually people can choose what they have. This might mean that they will get the minimum amount of insurance cover that they can because of the cost. However, with some insurances there are factors that make it cheaper, such as having a higher excess, reducing legal cover, not having added extras and so sometimes people will opt to have more insurance but a lower level of cover.

You also have to decide whether the amount that you are paying monthly is premiums is worth it. Consider the risk that you are taking on by not having insurance and whether you feel that it is worth paying the money for. For some people they will just not be able to afford many insurances but just take the ones that they have to or feel are the most important.

Alternatives

You can think about whether it is better to build up some savings instead of having insurance. Instead of paying into various different insurance policies you could the money into a savings account instead. It will not add up to vast amounts, so if your car was written off or your house burned down you would not have enough money to pay for it. However, if you needed to repair a white good or replace a broken phone or pay for vet treatment for your pet, then you may have enough. It is up to you to decide on whether you feel that saving up money will give you enough to cover the costs of any potential problems you may have with that item. For example, if you need to pay £75 a year to insure your washing machine, would it be better to save that money (and more if you can afford it) so that you can afford the repair and if it does not need one you get to keep the money.

It can be a gamble and you have to ultimately make the decision. You may decide that some insurance is too important not to have but with others you can save up money instead. Of course, you have to have good self-discipline with the saving and make sure that you are committed to putting money aside each month and that you will not spend it. This can be tough for some people and they find it very hard not to spend the money. If this is the case for you then insurance might be a better option as you cannot spend it.

Is it Worth Becoming Self-Employed?

Many people like the idea of becoming self-employed. They feel that they will be much better off being their own boss, compared with working for someone else. They like the idea of being flexible doing freelance or contract work and therefore being able to decide what work they do and when. However, there are pros and cons to being self-employed and it is worth understanding them all before going self-employed.

Money

Pay is a big motivator for most people when it comes to their jobs. Most people need a certain income so that they can afford what they want. Being employed means that you know how much money you will have coming in each month, when you are self-employed you do not. Many people think that this will be fine as they will be able to claim benefits if they are not earning enough. Under the new Universal Credit, this is not the case. If you are not earning enough money through self-employment you will need to prove that you are looking for work and claim unemployment benefit, there is no income support to top up earnings.

If you are an independent contractor then you should be able to get a higher pay for the work that you are doing compared with being employed. However, you will need to make sure that you pay your tax properly, as you will be responsible for it and you will get no holiday or sick pay, pension contributions or expenses. You will also be on a short contract and your job can be ended quickly and just because there is no work for you. An employee gets more job security with a longer notice period and they have to either be made redundant or there needs to be very good reason to get rid of them.

If you are working online then you will need to compete with many others, possibly even form abroad. Some may have much lower standards of living and therefore may be able to afford to charge a lot less than you and you may lose out to them. Alternatively, you may have to bring down what you are charging and this could mean that you will be being paid a lot less money.

Work

You may feel that it will be easier to pick and choose the work that you do. This is true, but there is no guarantee that there will be lots of available work that you will be able to do. It could be that you will be forced to do work that you do not really like just so that you can earn some money. Then as your experience grows in that field it may be what you end up doing all of the time, even though it is not what you wanted to do originally. You may feel that you need to work harder so that you can prove yourself and if you start this, you will have to keep it up. You may end up doing lots of small boring tasks just to get a little money.

Flexibility

You may like the idea of being able to be more flexible about when you are working. It can be great being able to fit work around family or being able to do it at a time the suits you. However, if you have deadlines, it may mean that you will be forced to work at certain times of the day anyway and so that may not work out as planned. It might be you that needs to be more flexible rather than your employer and you could find that you end up working unsociable hours because your employer is abroad or has high expectations.

So, although it can seem like a really good idea, you do need to be careful. Money is probably the most important factor as you will need to make sure that you have enough to cover your bills and if the work is sporadic or low paid, this may not happen. The flexibility that you are hoping for my also not happen and it may mean that you are working more hours or less sociable hours than before. It is therefore worth looking into before you make your decision. Make sure that you are aware of what work is available that you might like to do, how much it pays and what the expectations are. See whether you would be able to pick and choose between jobs or whether you would have little choice and would need to take on anything that comes along and risk low pay and odd hours. It is a hard decision but will depend on the industry that you work in as to whether you will be better off being self-employed. You will need to decide whether the pros of being self-employed are better for you than the cons.