It is difficult to offer a simple explanation of the term ‘financial products’, not just because it would probably bore you to death, but because they come in so many shapes and sizes. Buying insurance, for example, can feel like quite an overwhelming experience. However, financial products really do make the world go round! They can protect your loved ones, pay your bills, and help your savings grow, so don’t be put off.
What are financial products?
A ‘financial product’ is a pretty universal term, but it normally means something that helps you save, invest, protect yourself against loss, plan for retirement, or just manage your day-to-day financial affairs. They are often offered by banks, building societies, insurance companies, credit card companies, and many others including the government (in the case of pensions). Generally they exist in order to provide convenience and support to our lives (as well as make those who provide or sell them a bit of money!).
Financial products really do make the world go round!
You could spend weeks learning about all the financial products out there, what they do and how they can help you. But to save you getting all bogged down, we have compiled a list of some of the most important and commonly used; insurance, credit, pensions, saving and bank accounts.
Financial products – know your facts
I know we keep harping on about it, but it is impossible to overstate the importance of shopping around and doing your research properly. You would not believe the amount of people who take out financial products that end up being of no real benefit to their lives, because they don’t read the small print.
Research! Research! Research!
For example, make sure you don’t miss the clause in your car insurance that says in the event of an accident, it will only pay out on vehicles worth over £1000 if you own a 1978 Reliant Robin!
So, before you purchase any financial product, make sure you learn about the characteristics of the product as well as the costs, limitations or potential risks it may have. By understanding the T&Cs up-front you won’t get caught out later on and your product really will be there to support you when you need it. So…. Research! Research! Research!