Student contents insurance guide

Starting university is exciting but it can be a daunting experience, too. With so much of your focus on meeting new friends, surviving Freshers' Week, starting your studies or simply finding your way around a new city, protecting your belongings might not be top of your list of priorities.

However, if you take just a minute or two to think about the things you own, and in many cases rely upon, such as your laptop, mobile phone, TV, clothes, iPod or camera, the value is probably greater than you think. So while buying insurance may seem dull, it's one of the most sensible investments you can make as a student, particularly since young people in the 16-24 age group are three times more likely to be victims of burglary and one in every three students becomes a victim of crime (source: Home Office Report ‘Crime in England and Wales 2007/2008’).
So what is student insurance and why do I need it?

Some students are under the impression that their belongings are covered under their parents' home insurance, but this is often not the case and even where cover is available it will usually be restricted. As a result, standalone student contents insurance policies are available to protect against loss or damage caused by risks such as theft, fire, vandalism, storm, flood and burst pipes.
With the average student now owning over £4,000 worth of belongings (Source: Endsleigh Student Possession Research 2008) student contents insurance can provide you with valuable peace of mind, regardless of whether you are in your first or final year of studies. Although insurance won’t make the loss, theft or damage of your belongings any less upsetting, it will ease the financial strain of replacing them.
Getting the right student contents insurance
The most important aspect of finding the right student insurance policy is ensuring that it provides suitable cover for your lifestyle. Always check the small print of the policies you're interested in to ensure they provide suitable cover for your needs. You may be living in shared accommodation or halls of residence but some student insurance policies will not cover ‘walk in theft’ (burglary without forced entry), and other policies may not cover pedal cycles or musical instruments as standard, for example.

Some insurance companies will offer flexible cover options so that you can pick and mix your cover depending on what you need - meaning you often have the option to insure one item, a selection of items or the contents of your whole room. To ensure you have an adequate amount of cover check the policy terms for item cover limits, any ‘total valuables’ limits (the maximum you can claim for multiple items), the excess (the amount you have to contribute in the event of a claim) and any exclusions (items or risks that are not covered).

Remember to check the period of insurance too, as your policy may cover your possessions during term time only and should you need cover to continue during holiday periods then you will need to speak to your insurer to arrange this.

Depending on the insurance company, other policy benefits may include a 24 hour student helpline, legal expenses cover, cover for course fees should you be deregistered due to death, illness or accident and accidental damage cover.

Permanent Life Insurance

Permanent life insurance is the umbrella term used for types of life insurance that do no expire. They combine a death benefit with a savings portion and are deemed as profit policies. The savings element builds to provide the policy with a case value against which the policy holder can borrow money or take an income in way of regular withdrawals. A withdrawal will be made to cover a future financial implication such as paying off a loan or paying college fees for a child.

There are two main types of permanent life insurance which are universal life insurance and whole of life insurance. Below we will talk more about both of these.

In order to borrow against the savings element of a permanent life insurance policy, there is usually some sort of waiting period after the purchase of the policy in order for a cash value to accumulate. Furthermore, if the amount of the unpaid interest on the loan plus the outstanding loan balance exceeds the amount of the policy's cash value, the policy and all coverage will automatically terminate.
Permanent life insurance policies enjoy favourable tax treatment. The growth of cash value is generally on a tax-deferred basis, meaning that you pay no taxes on any earnings in the policy so long as the policy remains in force. Provided you follow guidelines to certain premium limits, money can be taken out of the policy without being subject to taxes since policy loans generally are not considered as taxable income. In addition to this any withdrawals up to the amount of premiums paid can be taken without being taxed.
 The policy is taken out with an insurer and premiums paid periodically, most commonly monthly. The premium will cover the cost of the life insurance and the remainder of this is credited to a cash value that the policy accumulates. Each month this cash value is also credited with interest and the policy is debited, also each month, with the cost of the insurance and any other fees that the insurer stipulates, such as admin fees, if there has been no premium payment that month. The insurer will decide how much interest is applicable to be credited to the value but this is usually related to certain financial index rates.
As there is a cash value to this type of life insurance it is possible for there to be features such as a policy loan, or for the policy holder to take periodic withdrawals from the policy.
As far as premiums go they are most commonly paid periodically such as monthly, quarterly or annually which can be fixed or flexible. However it is also possible for there to be a single up-front premium at the start of the policy.
There are risks involved with taking out Universal life insurance because of it being a potentially profitable policy. These need to be studies carefully before you take out his type of life insurance and each insurer will have literature available clearly highlighting the risks.
The obvious benefits of life insurance are to cover financial implications upon the death of somebody who is financially depended upon, more often with life term insurance policies because they have no case value. However there are also living benefits of life insurance and many people use life insurance, and in particular cash value life insurance as a source of benefit to the owner of the policy (as opposed to the death benefit which is provides benefit to the beneficiary as we have mentioned in life term assurance). These benefits include loans, withdrawals, collateral assignments, split dollar agreements, pension funding, and tax planning

Benifits of insurance

Most of us think of insurance as a necessary evil at best. We rarely, if ever, see the benefits of purchasing insurance.
We need only to look at some of the basics of how insurance adds to our society to understand its value.
First, insurance reduces the money we all have to pay for uncompensated victims of accidents. Without insurance, many who were injured in an accident would become a drain on state and federal government agencies.
In short, your taxes would increase in order to pay for rehabilitation or care of the sick and injured.
You need an insurance policy to purchase a new car or a home. Without insurance to cover a bank’s financial interest as a lien holder in your loan, how would you convince the bank to lend you money in the first place?

Another benefit to us as individuals is mandatory liability auto insurance. If someone ran into your car and caused you bodily injury, how would you pay for the medical bills without insurance?

Or if someone got injured on your property, how would you pay for the damages?
Again, this saves us all from paying huge tax bills. If insurers didn’t buy these bonds, we would have to settle for poor roads and bridges, or foot the bill ourselves via higher taxes.