Have Some Reasons to Review Your Life Insurance
When I first was signed up to Life insurance I was 17, I went to the National Bank for a personal loan for a tricked-out Subaru.
The person approving my personal loan was adamant that I needed Life insurance to match the personal loan.
By the time I needed to think about Life insurance again it was 10 years later when I was a new Dad, I was told to be a responsible adult and sign up to more Life insurance.
Now, I never cancelled the first Life insurance, I now had 2 Life insurance policies with 2 different companies for very different amounts.
When I look back at my insurance, the companies I used, amounts I had signed up to, and how I was sold the cover.
My Insurance had no value to me, I had not thought much about it, and never considered what the person claiming would need to do.
In my head though, I had been a responsible adult and I was covered.
How often have you thought ‘I should really look at my insurance’, then taken no action?
The more I work with clients, the more I see what I went through as a very typical scenario.
We sign up to insurance when we are told to or have a specific need to, for example, you now have debt, you cover this debt with Life insurance.
Here are some easy tips to quickly review your Life insurance.
- Firstly list the insurance companies you are paying premiums to – scour your accounts for premiums to insurance companies.
- List what products you have insured with each company
This is your starting point it will provide you with an overview of what you are already insured for and the premiums you are spending.
If my sole reason for signing up for Life insurance is to match my debt.
This is a very black & white amount to insure you for.
When I receive my annual Policy Schedule from the insurer, I would be contacting them to reduce the amount of my Life insurance to what my Debt was reduced to over the previous 12 months. I am only paying for the amount of cover I need while I need it.
Where having a Financial Adviser becomes key in your review is when you have multiple reasons to have the level of cover you do.
There are other benefits within your Life insurance which I wrote about in ‘Why do new parents get Life insurance?’.
When I am discussing this with clients we think about what they want to have covered with their Life insurance.
Regular reasons I see included into a Life insurance amount, Funeral, Debt, Raising Children and Funds for the Family.
Do your reasons match your Life insurance?
When completing a self-review of your insurance it does not need to be an all-day task.
Lay out some clear reasons for your insurance.
Match your insurance to the amounts needed to cover the reasons.
Make sure to check who the funds will go to at claim time.
If your insurance is like mine was, please reach out to a Financial Adviser like ourselves.
With your permission, we contact your insurers, gather all your current insurance, assess what your need is, recommend retention or alteration to your current insurance and at claim time.
Jonathan Whorwood
Financial Adviser
The Insurance Supply Co Limited
Insurancesupply.co.nz