Cutting down on your personal insurance cover appears easy when trying to cut outgoings, however many policies are designed to provide help to you in times of need.

A survey, carried out on behalf of American Express, indicates that many of us intend to cancel insurance to save money. 27 per cent of the consumers surveyed, planned to reduce their medical insurance and 17% were considering a reduction in pet cover.

The chairman of Amex Insurance Services, says that it is worrying when consumers reduce the cover of the very insurance that protect them.
Tony Solomon, agrees with this view, saying do not cancel you policies, because loss of cover may adversely effect their family and themselves in the years to come. life assurance and critical illness cover are both too important to sacrifice. If the worst happened and you died, or fall terminally ill, then cancelling your cover could leave your family with without hope, he says.

You are advised to talk to your insurer if you are having difficulty paying your monthly premiums, as they may be able to arrange a tempoary reduction in the amount of cover.

The BIBA, says that people do not appreciate what is involved in replacing possessions, if they are stolen. He advises everyone to take out home insurance, 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, you can reduce this by 25% by canceling the extra options.

Pet insurance 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 CIIC, which pays out a lump sum, rather than mortgage cover or health insurance.