When buying insurance cover, there is a temptation to renew continually, or some people may look to reduce their premiums. Very rarely do people stop to take account of the changes in their lives since they initially took out their cover, which can sometimes lead to problems in the future. What would you say if we asked you the last time you reviewed your protection insurance?
Do you review and renew, or simply renew?
In reality, all insurance policies should be reviewed regularly to ensure that they provide relevant cover and the premiums are competitive. In this article, we are considering policies such as:-
- Life assurance
- Income protection
- Private medical cover
- Long-term care insurance
- Critical illness cover
We live in a world where time seems to be the most expensive commodity, with too little time and far too much to do. Consequently, when the annual insurance policy renewals come up, many ignore and renew or just call up and confirm. This prompts the question: do you need to review each insurance policy?
Adapt your cover to your changing lifestyle
In our 20s, 30s, 40s, 50s, 60s and beyond, we all have hopes and aspirations which typically change along the way. Similarly, ensuring that your insurance cover reflects your current lifestyle is essential. Unfortunately, it is only when people need to make a claim that they realise they are exposed and underinsured.
The following scenarios, individually and collectively, should prompt you to review your insurance cover:-
Lifestyle changes
Any significant lifestyle changes could impact various insurance cover such as life insurance, income protection and even medical cover. For example, you may be newlywed, expecting a baby or possibly going through a divorce. These are all life-changing scenarios that should prompt you to review the cover available not only for yourself but also for loved ones.
Financial changes
A new job or promotion could lead to a significant increase in income, which can impact your standard of living. This may lead to more expensive furniture and jewellery, all part of your home insurance, and potentially an increase in your income protection insurance. It can be very easy to forget to upgrade your policies, but it can be costly if you fail to do so and need to make a claim.
Health and lifestyle changes
We live in a world where improved diets and fitness regimes are everywhere, with significant financial benefits for those who lead a healthier lifestyle. Your insurance providers will likely appreciate something as simple as stopping smoking or increasing your exercise and losing a considerable amount of weight. There may be scope to renegotiate your life cover and premiums, bringing them more up-to-date and a better reflection of your current lifestyle.
On the flip side, as we get older, we may be more susceptible to age-related medical conditions, which may or may not be covered in your existing private medical healthcare/critical illness coverage. Specialised insurance groups are now focusing on the older generation, with many welcoming updates on your medical history while not necessarily increasing your premiums. It’s essential to keep an honest and upfront relationship with your insurers!
Additional risks
As many people look to rebalance their approach to work and family time, this can bring additional risks into play. Your changing life may involve the addition of a new and hazardous hobby or extensive travelling. It’s easy to ignore these additional activities and fail to update your insurance, but unfortunately, you could pay the price further down the line.
Business and personal cover
Numerous insurance policies can be adapted for business and personal issues, and they should all be reviewed regularly. Avoid the temptation to automatically renew any insurance protection, they should all be part of your broader annual financial review. Remember, there may even be scope for group discounts where it is possible to use the same provider for numerous policies.
Summary
We have worked with many clients who have taken out perfectly adequate insurance protection at the outset, only to fail and update their cover in line with their lifestyle, business interests, and finances. We always include insurance protection as an element of your annual review, and while it may be a tick-box exercise most of the time, this is not always the case.
It is easy to automatically assume insurance premiums and cover need to increase when there may be scope to reduce the cover in line with your changing lifestyle. We welcome the opportunity to discuss your insurance requirements, review your current protection, and look to enhance cover, reduce premiums, or do both.
Contact us today, and we can look at your existing cover and identify any potential changes that may enhance your long-term financial security.