5 Reasons Why You Need to Review Your Personal Insurances
Your personal insurance is an important part of your financial plan as it provides peace of mind and financial protection to you and your family.
At Sound Life, we believe It's a good idea to review your insurances as your needs and circumstances may change over time. Here are our top five reasons to consider reviewing your personal insurances:
There have been changes to your occupation
Insurance premiums are generally calculated based on factors such as your age, health status, occupation and smoking status. If you change occupations, your cover may no longer be appropriate and in some cases may not provide cover for your new occupation. Additionally, if you’ve received a pay rise, you may need to review or increase your income protection sum insured.There have been changes to your lifestyle or health
If you've given up smoking (generally for a period of 12 months or more) you may wish to let your adviser or insurer know as it could result in the premium reverting to non-smoker rates, which will lower the premiums you pay. Other positive changes to your health including weight loss may also lower your insurance premiums.On the flip-side, if your health has deteriorated since you first took out your insurance, it may be difficult to obtain increases or make changes to the provider or type of insurance. Changes generally require you to undergo medical underwriting. Remember, if you are considering making changes to your insurances, it's super important that you don't cancel existing policies until your new applications have been accepted by the insurer and are in force.
Your family situation has changed
Major changes to your circumstances such as marriage, divorce, loss of a loved one, or the birth of a child will generally necessitate a review of your insurance needs. A new baby will generally mean additional financial responsibilities, whilst as children grow up and become financially independent, there may be less of a need to have insurance provisions in place to provide for them. In the event of divorce or the loss of a loved one, you may wish to review the level of cover and the nominated beneficiary/ies for your policies.You’ve taken on more or less debt
The purchase or sale of assets and an increase or decrease in borrowings generally signals time for a review of your levels of cover as sums insured often take into account your level of liabilities that would need to be repaid (if no assets are sold) in the event of death, disability, illness or injury.It’s been a long time since you reviewed your policies
Insurance companies often review and upgrade their policies to provide better coverage to policyholders and to remain competitive within the industry. Insurance companies may increase policy definitions or offer cover under broader definitions which can make it easier to claim. These improvements are not always automatically passed onto all existing policyholders. It can pay to check whether the policy has a “guaranteed upgrade” clause, which states that future improvements to the policy will also apply to existing policyholders.
If it’s been some time since you last reviewed your insurances you may wish to review them or get in touch with us at Sound Life to help you to determine whether your current cover and policies are adequate.
Sound Life & Superannuation Agencies Pty Ltd trading as Sound Life Financial Services is the Authorised Representatives of Synchron, AFS Licence No. 243313.
The information contained in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
