10 Nov 5 Reasons You Should Review Your Insurance
We know that it can be tedious to review your life and disability insurance policies. There is a lot of complexity to consider – all those medical questions, having to provide financial evidence etc. So much hassle – may as well leave it for another year, right?
It’s very tempting, but protection is a key part of your current and future planning and here are 5 reasons why you should review your policies on a regular basis.
1. Change in circumstances
Life can change very fast, as we all know. In the current economic climate nothing is guaranteed and change is coming at all of us thick and fast. In the last 12 months for example one of my best friends has bought a house, got married, started a new job and is now pregnant! Talk about a fast mover! But the reality is that a change in circumstances is a serious reason to review your cover as it may no longer be adequate to meet your original requirements and wishes.
2. The online lure
I personally dislike and am very distrustful of life and disability policies sold online. They are often riddled with clauses that screw you at claim time and they mislead consumers with slick advertising and false promises. Often they are more expensive than a better quality insurance policy sourced through an adviser because they need to compensate for a high turnover as people cancel often. Plus there is the service aspect – or lack thereof! The people in the call centres just don’t live and breathe insurance like advisers so claims can be a very hard process on the insured person. It’s you against them with no help. Don’t get me started on online/direct insurance! I mean do you really, really want Woolworths supermarket holding your life insurance? It blows my mind. Anyway, what I’m saying is if you have a policy you took out online/direct you should probably see an adviser and have a comprehensive review because right now all you’ve paid for is a piece of paper.
3. Product innovations
Believe it or not there is are some pretty cool innovations in the life and disability insurance space designed to be easier on your cash flow and help you be better insured. Only advisers can deal in this structure and my clients love it. There is another insurer who is really focused on helping their clients improve, maintain and engage with healthy lifestyles – and rewards clients who engage with massive discounts on their insurance policies, on Qantas flights, healthy groceries and much more. If health and lifestyle are your thing you might be able to benefit big time in this space. It’s always worth checking with your adviser as to whether there have been any product changes you should know about – both from your current insurer and from others.
4. Tax and planning applications
Did you know that tax is payable on some lump-sum benefits through superannuation? Have you considered the implications of nominating your beneficiaries and who you want to get the money in the event of your death? Who will care for you in the event of a disability? Has your income protection been set up as to still allow you to contribute to superannuation, so that you have a good balance of super to rely on after your income protection cuts out at age 65? Have you been claiming your tax deductions on income protection that you’re entitled to?
These are all extremely pertinent and important issues to revisit regularly so you don’t miss out or get penalised.
5. Claims and health changes
Has your health changed since taking out your policies (for better or worse)? By that I mean that if you had any special terms placed on your policy at application time, and your health has improved or stabilised since then you might be able to get those special terms removed, resulting in lower premiums and/or better quality cover! Conversely, if your health has had a turn it’s a good idea to speak with your adviser and explore what your options are; whether that’s to make a claim, restructure your requirements or lock cover for the long term due to future in eligibility to apply for insurance.
It’s a funny thing, you know. We get our cars serviced regularly, have our annual checkup at the dentist/doctor and go to the gym to ensure we are performing at our best. But the only time the majority of people review their insurance is when they look at the bill. I’m all for budgeting and being smart about what insurance you may or may not need, but reactive outcomes are generally not the best way of managing financial affairs.
If you feel you need to review your insurance policies based on any of the points above, or you have recently received your renewal notice and the thought “There’s no way I’m paying that much!” Please give us a call.
Please note this information is general advice only. Please seek advice before acting on any information in this article.