To most people insurance is somewhat of a swear word but a necessity. If all goes well you'll never have the misfortune to claim on any insurance policy, but will have paid out in the intervening period for something it turned out you didn't actually need!

The flip side of this is that during those months or years you'll have the peace of mind that knowing you're covered for all eventualities (or as many as you can insure against).

Nearly everyone who drives will have their car insured with most of them being comprehensive policies and may be paying anything from £100 to £1000 per year. But fewer people have their lives, health and income covered, which in reality would be a far worse occurrence than losing your car.

If money was no object you would take out every possible insurance at the maximum level to fully protect yourself, but if money truly was no object you may not need the insurance anyway!

It is therefore wise to consider all the options available and prioritise those which would have the greatest effect on your life.

Life Insurance
This is the most straightforward type. If you die it pays out to your estate. It can be arranged on a level or decreasing term basis. On a level basis it will guarantee to pay out a set amount if you die within the term of the policy. On a decreasing basis it is designed to be used with a mortgage and will guarantee to pay out enough to cover your mortgage up to the end of the mortgage. If you have a spouse or partner you can also choose between a sole or joint application. The joint cover will be slightly cheaper but is not as flexible to cope with your future requirements and will only pay out on the 1st death. With sole policies there are 2 policies to pay out which effectively doubles the total cover for around £3-£5 extra per month.

Terminal Illness Benefit
Usually included free with Life Insurance and designed to pay out a lump sum if you are diagnosed with a terminal illness and it is believed that you will die in the next 12 months.

Critical Illness Insurance
Usually taken in conjunction with Life Insurance on a first event basis but can be separate. Covers against the so called 'Dread Diseases', the exact illnesses will differ from company to company. Like Life Insurance it can be level or decreasing, pays out a lump sum and can be arranged on a sole or joint basis.

Accident, Sickness & Unemployment Insurance
This is designed to replace your income in the eventuality of any of the three events preventing you from working. It will pay out a monthly sum for up to either 1 or 2 years. Normally there is a waiting period before you can claim.

Permanent Health Insurance / Mortgage Payment Benefit
Will pay out a monthly sum if you are not able to work due to your health, until you are able to return to work or reach retirement age. In the case of Mortgage Payment Benefit it will stop paying when your mortgage is paid off. Again there is normally a waiting period before you can claim.

Buildings & Contents Insurance
It covers your home and contents against theft, fire, flood etc. This can include accidental damage cover. It can also be organised as 2 separate policies but may cost more as most companies give you a discount for doing both with them.

Waiver of Premium
This is a small add-on available on most insurance policies that will pay your premiums if you are unable to work due to illness.