what are the advantages of life insurance? - ANSWER provides permanent protection, flexible, tax benefits, low premiums for new policies what are the advantages of travel insurance? - ANSWER good f... or emergencies (can get booking costs back if your flights are cancelled), if you contract a disease your travel insurance will cover treatment costs that your medical insurance might not, may policies provide coverage for lost, stolen or damaged luggage what are the advantages of pet insurance? - ANSWER can cover unexpected vet bills, provides peace of mind, can save the life of your pet, allows you to know your veterinary costs ahead of time what are the advantages of health insurance? - ANSWER gives you the opportunity to maintain or improve your health by providing a low cost way to attend your physician visits and buying affordable prescription drugs, flexible plans that can be customised, covers surgery and emergency bills, provides peace of mind what are the disadvantages of car insurance? - ANSWER premiums can be high depending upon assessed level of risk, normally there is an excess that must be paid what are the disadvantages of home & contents insurance? - ANSWER doesn't cover flood damage or freezing of plumbing, extra monthly payment, high monthly premium because of low deductible, coverage of jewellery costs more to get. what are the disadvantages of life insurance? - ANSWER fixed periods of coverage, premiums may increase, limited options for people of poor health what are the disadvantages of travel insurance? - ANSWER can be expensive and can sometimes outweigh the cost of your holiday, may not cover everything that you need coverage on. what are the disadvantages of pet insurance? - ANSWER may need to make a claim on your policy and may need to pay for a post mortem if your pet passes away, pre-existing conditions aren't covered, doesn't cover routine vaccinations and other treatments what are the disadvantages of health insurance? - ANSWER can be unaffordable for some, very confusing policies, can apply and be denied coverage altogether, tends not to cover pre-existing conditions. what the advantages of ISAs? - ANSWER tax isn't charged on interest earned allowing the saver to keep all of the rewards for saving, interest rates are sometimes slightly higher than in alternative savings accounts what the advantages of deposit and savings accounts? - ANSWER provides protections, majority of banks and credit unions are insured so the money is secured and safe, easy to setup, simple to withdraw money from a savings account, entitled to 6 withdrawals per month, can open an account with little money what the advantages of premium bonds? - ANSWER no risk of losing money because premium bonds are supported by the government, instant access can withdraw your investment anytime, tax-free returns what the advantages of bonds and gilts? - ANSWER safe investments, interest payments of bonds are sometimes higher than the general level of dividend payments, often liquid, have legal protections what the advantages of shares? - ANSWER don't have to travel or do any physical work, very flexible can work in your own time, less investment what the advantages of pensions? - ANSWER tax won't be paid on your pension contribution, compound interest so the earlier you start the better, guaranteed income at the end, employer contributes each month what the disadvantages of pensions? - ANSWER lack of access can't access your pension finds until you're 55, risk of poor returns as your pension will be invested into stocks and shares, very complicated what the disadvantages of shares? - ANSWER if you buy the wrong shares it could result in a heavy loss, quarterly results can result in a drastic change in the price of shares what the disadvantages of bonds and gilts? - ANSWER not 100% secure, can lose much or all of their money if the company goes bankrupt, same bonds a re callable - so the company can choose to pay the bond off early what the disadvantages of premium bonds? - ANSWER no interest if your bonds aren't chosen in the monthly prize draw you won't receive any returns, low odds very unlikely to win, loses value if you make a withdrawl what the disadvantages of deposit and savings accounts? - ANSWER may be bank fess like account or maintenance fees especially if you maintain low balances, may be required to carry a minimum amount if it falls below the amount the bank may charge fees what the disadvantages of ISAs? - ANSWER notice is often required to make withdrawals and according to the agreement there may be a limit set of the number of withdrawals made, if the saver makes more withdrawals than set out in the agreement then the penalty may cancel out the tax savings, limit set on the annual amount that can be placed in an ISA. what are the 6 types of personal borrowing? - ANSWER mortgages, hire purchase, payday loans, overdraft, personal loans, credit cards personal loan - ANSWER gives you the ability to borrow a set amount of money, normally for a specific purpose, to be repaid in regular instalments. payday loan - ANSWER short term source of finance used to bridge the gaps between now and next receiving a wage credit card - ANSWER goods are paid for by card and can be paid for either at the end of a set period, normally a month, when a statement is issued overdraft - ANSWER allows you to withdraw money that you don't have in a current account mortgage - ANSWER long-term loan to fund the purchase of assets, normally paid back over a long time, usually 25 years. it is secured against an item like a house. hire purchase - ANSWER allows you to have use of an item immediately but pay for it in regular instalments. the item remains the property of the seller until all instalments have been made what are the 6 saving and investment options? - ANSWER ISA, deposits & savings account, premium bonds, bonds & gilts, shares, pensions when are saving and investment options available? - ANSWER when you are earning or receiving more money than you need to cover your expenditure Individual savings account (ISA) - ANSWER a type of saving account where the holder is not charged income tax on the interest received. deposit and savings account - ANSWER accounts where interest is paid on the balance and normally the holder needs to give notice before withdrawing funds premium bonds - ANSWER government scheme that allows individuals to save up to a set amount by buying bonds. the bond holder doesn't receive interest on their savings but each bond is placed into a regular draw for cash prizes what are financial institutions? - ANSWER organisations that offer financial services to individuals and businesses what are the 8 examples of financial institutions? - ANSWER banks, building societies, pension companies, payday loan companies, pawnbrokers, insurance companies, credit unions, NSI what the advantages of the Bank of England? - ANSWER responsible for protecting the financial stability of the economy as a whole, set interest rates at a level designed to help achieve a stable economy, lends to banks what the advantages of banks? - ANSWER reliable, secure, private, lots of options like services and account types, pay interest on credit balances on most type of accounts what the advantages of building societies? - ANSWER can offer better interest rates and savings than banks, offers security snd dependability through long term investment, more democratic, offers a range of services, secure place to store money what the advantages of credit unions? - ANSWER offer a range of services, good cooperative and group feeling, secure place to store money, often offer additional benefits to the community or a good cause, higher interest payments what the advantages of national savings and investments? - ANSWER savings and investments are secured as government backed, extremely secure and guaranteed by the government, offer additional services what the advantages of insurance companies? - ANSWER offer security and peace of mind, easy and regular monthly payments make planning easy, wide range of services and levels of cover to suit one's needs what the advantages of pension companies? - ANSWER provides a structure that helps to plan for financial security after retirement, deductions can be taken directly from pay and be fully or partially matched by an employer's contribution, experts are employed to make investment decisions what the advantages of pawnbrokers? - ANSWER quick way of getting money for a short period of time and interest isn't charged what the advantages of payday loans? - ANSWER immediate cash available even for those with poor credit history what the disadvantages of payday loans? - ANSWER very expensive and easy to get into deeper debt, interest charges are likely to be high, often have to pay back a sum which is substantially higher than the original amount borrowed. 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