Insurance is all about protecting what you have now and what you would like to have in the future. But, as you go through life, the protection you need for the present and your future changes. The key to insurance, therefore, is being attuned to these changes, to make sure you always have the right sort and in just the right amounts. It's a waste of money having too much, but you can't afford to have to little.

What I'll look are the types of insurance relevant to your journey through life, showing when you need what protection, and how much.

Insuring your possessions and you

First up, there are two fundamental areas of insurance - your possessions and yourself - whether it's their home and its contents, their car, boat or jewellery - and to varying degrees most people do insure these things.

Considered less important by many people (and incorrectly so) is personal insurance - this includes your life, income and health. The reality is that at certain times in your life these insurances are at least as important as the insurance on your possessions, arguably even more so. Yet it is an area where many are under insured, based on the assumption that "it won't happen to me" - but unfortunately it can, and sometimes it does. So you need to be prepared.

Shop around, read the fine print

Now, when you decide to buy insurance, regardless of what sort it is, there are two important steps to take. The first is to make sure you shop around thoroughly. This is because there are significant differences in the premiums (prices) and conditions of the policies offered by the various insurance companies. The second, which follows from this, is to make sure you know exactly what each policy covers, or, more to the point, what it doesn't. If this involves quizzing the insurance salesman or broker closely and reading through the policy (as boring as that may be), do it. It's your life, health, income or your possessions being insured, so it's up to you to make sure the cover is right.

Insurance checklist

Apart from the obvious questions about the premium, the other questions you need to ask before you buy include:

• Is there an excess (an initial amount you pay in the event of a claim)?
• Are there no-claim bonuses (where the premium reduces over time if you make no claims, particularly common with car insurance)?
• Is there a waiting time for benefits?
  
• Are there any discounts (for example, for a fitted car alarm with car insurance, for non-smokers with life insurance, for people aged over 50 with household insurance)?
• What are the exclusions of this policy and under what conditions will the insurer not pay a claim?
• What proportion of claim does the insurer pay?
• How long does it take to process a claim ?
• Can I have a copy of the policy to read?
  

You also need to pay close attention to the way insurance companies define things. With income/disability insurance, for instance, the definition of what a 'disability' is varies, with enormous significance in the event of a claim.