Saving for musicians' insurance

There is no greater luxury than owning and playing a musical instrument; the ability to produce music, to 'jam' together in a band and to entertain large audiences. Owning a musical instrument can bring a lot of joy and it is great to be able to pick up your instrument and strum and play away to relieve stress. It is one of life's greatest enjoyments.

Musical instruments, though, do not come cheap and even the most basic of guitars, saxophones or drum kits can cost hundreds of pounds. For a pricier musical instrument, or perhaps even an antique one, the cost could run into the thousands of pounds. That is why it is important to have musicians' insurance, giving you the peace of mind that your instrument can be replaced if it is ever lost, stolen or broken. By saving for musicians' insurance, you'll be able to play your musical instrument safe in the knowledge that you are completely covered should the worst happen.

The money you have set aside in savings can be used to purchase musical instrument insurance, and most banks and insurance providers will offer specialised musical instrument insurance. By saving towards the cost of insurance you are also avoiding paying monthly interest if you decide to spread out your annual premium in monthly instalments. Some insurance providers also ask you to pay an excess amount on insurance; this means that you may have to fork out a certain percentage of the cost of a new musical instrument should you ever make a claim. By having savings put aside, you will be able to afford any excess that is caused by claiming for the loss, theft or break of your instrument, too.

It may not just be the cost of insuring your instrument that you need to worry about. If you rely on your musical talent to generate a regular income, then you may also need to insure yourself in case of an accident or injury; for such an eventuality can impede upon your ability to pay the bills.

Similarly, if you regularly gig or play music to larger crowds and do this through your own venue (perhaps you even own a football stadium!) then you will need public liability insurance. This insurance protects the public from any accident that may occur whilst attending your gig. The insurance will cover you in case an injured party decides to claim for damages caused or injuries sustained. Saving towards, and indeed taking out, all these forms of insurance is of paramount importance if you are looking to pursue a successful musical career.

The best financial instrument to start saving with is an ISA account. ISA is an acronym for Individual Savings Account and is different from your average savings account as you are not taxed on the interest you accrue, allowing you to pocket more on the money you save, making them the best savings accounts out there. There are two basic types of ISA.

The cash variant is not so different from your typical current account; you do not assume greater risk but are generally offered a higher interest rate. However, you are only able to invest a maximum of £5,340 in any given tax year and must be over 16 years-old. There are both fixed term and instant access ISAs. The only difference being that with the instant access type, you can access your savings at any time without incurring charges, whereas you are locked into an agreed period during which you are unable to access your savings with the fixed term ISA. Again, you can choose between a variable or fixed rate ISA with these.

The investment account, on the other hand, can be a riskier but more lucrative alternative, depending on the investment decisions. You are able to invest double that of a cash account in each tax year; £10,680. The best feature of an investment account is flexibility - you decide on how your money is invested; alternatively, you can leave it up to an investment manager or fund and simply state what risks you are willing to assume.

These high interest savings accounts will give you greater returns, leaving more of your hard-earned money to cover any excess should you ever need to replace a new instrument. It is always important to shop around to find the best offer. All banks will offer some form of savings account, but even between high street banks interest rates will differ significantly. It could be that one offers a two per cent interest rate and another a four per cent interest rate.

Whichever option you choose, it is always important to put money aside in case it is needed. Plus, if the interest continues to accrue, you could treat yourself to a new musical instrument.