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Cutting down on your personal cover seams ideal when trying to reduce outgoings, however many insurance policies are used to protect you in times of need.

A review, carried out on behalf of AEIS, has shown that many of us intend to cancel insurance to save money. 27 per cent of the consumers surveyed, planned to reduce their health cover and 17% were considering canceling pet insurance.

The managing director of AIS, says that it is worrying when consumers cancel the very products that ensure their financial stability.
Tony Solomon, agrees with this view, saying people should think twice before cancelling, because loss of cover may have a damaging affect on their family and themselves in the years to come. term life insurance and critical illness cover are both too important to sacrifice. If the worst happened and you died, or fall seriously ill, then cancelling your cover could leave your family with without hope, he says.

If you cannot afford your premiums you must talk to you insurer.

The BIBA, says that people do not appreciate the overall value of their possessions and the cost of replacing them, if they are stolen. He advises everyone to take out buildings and contents insurance cover, but to look at reducing your cover level, as they may not need all your possessions covered. For example, contents insurance costs about 149 pounds a year on average, a reduction of 25% maybe possible by cancelling extra options on the policy.

Pet cover may appear to be unnecessary, but without cover you may struggle to pay an expensive vets bill in an emergency. So which policies are you safe to cancel? Referring to health insurance, Solomon says that many people get free health insurance from their employers. However, you must protect your families finances. Therefore, it would be advisable to choose Critical illness, which pays out a lump sum, rather than mortgage protection or health cover.