Which types of insurance are worth getting, and which are rip-offs?

Most of the time organisations are happy to give us journalists information, providing we credit them. On occasions, though, information is unreliable or hidden, leaving us with the daunting task of using our brains. Still, this gives us something to do whilst we wait for the story of the century to call us on the phone using a codename, leading to the inevitable fall of a president.

Today is one of those days where I've been forced to pass the time by thinking. I'm looking at which insurances are cost-effective. Some insurances are unbelievably poor value, so no one rushes to give us data on this. Even so, I've done my best to piece information together.

Below are ten insurance categories ranked by value for money. To order them, I'm using (or extrapolating) what's called the 'claims ratio'. This figure tells us how much of the money we pay in premiums is paid out in claims.
Insurance league table

Insurance league table
Rank
Insurance
Claims ratio

1
Life
160%

2
Private motor
84%

3
Accident & health
70%

4
Travel insurance not bought through travel operators
67%

5
Income protection & other
57%

6
Property
55%

7
Mobile phone insurance bought through your network
47%

8
Financial loss
41%

9
Travel insurance bought through travel operators
40%

10
PPI
19%


1. A clear winner

What does 160% mean for life insurance? It means that for every £1 you pay in premiums, insurers are paying out £1.60 in claims. You read that correctly!

Life insurance is currently too cheap. Insurers will have been boosted by the returns of the stock market last year. (It's typically by investing our premiums that life insurers make a profit.) However, we can't expect insurers to keep prices where they are. It's better not to wait if you need it now, because you can lock in the price for 20 years or more. You can compare quotes here.
Source: lovemoney