The insurance you arranged years ago may not suit your current circumstances. Life changes, needs evolve, and policies may not keep pace. Regular insurance reviews ensure you are protected appropriately without paying for cover you no longer need.
Set it and forget it does not work for insurance.
When To Review
Major life events should trigger an insurance review. Marriage, having children, divorce, buying property, and significant income changes all affect your insurance needs.
Annual reviews are also valuable. Even without major changes, small shifts accumulate over time. An annual check ensures your cover stays aligned with your life.
Policy renewals are natural review points. When your premium renewal arrives, take time to reassess rather than automatically paying.
What To Check
Verify your cover amounts still match your needs. A policy taken out when you had a small mortgage may be inadequate now, or excessive if you have paid off significant debt.
Check your beneficiaries are still correct. Life changes may mean previous beneficiaries are no longer appropriate.
Review the policy terms and exclusions. You may have forgotten what is and is not covered. Surprises at claim time are costly.
Common Reasons For Under-Insurance
Many people take out insurance and never increase it. Inflation erodes the real value of fixed cover amounts over time.
Income often increases faster than people update their income protection. A policy that replaced your income five years ago may now cover only half.
Having children or taking on more debt increases your protection needs. Cover that was adequate before children may be insufficient after.
Common Reasons For Over-Insurance
Mortgage reduction means you may have more cover than needed. If your mortgage was $500,000 and is now $300,000, you might reduce life cover accordingly.
Children becoming independent reduces your obligations. Once they are financially self-sufficient, you may need less family protection.
Workplace insurance additions may duplicate personal cover. If your employer provides group life insurance, you might be able to reduce personal cover.
Comparing Your Options
Insurance markets change over time. Newer policies may offer better terms, more comprehensive cover, or lower premiums than policies taken out years ago.
Switching insurers is possible but requires care. Pre-existing conditions may not be covered by a new insurer. Never cancel existing cover until new cover is confirmed.
Existing policies have value because they cover conditions that developed after you took them out. Weigh potential savings against losing established coverage.
Working With Your Adviser
If you have an insurance adviser, schedule regular reviews with them. They can assess your current cover against your circumstances and recommend adjustments.
Advisers can also check whether better options are available in the market and help you navigate any switching considerations.
Even if you arranged insurance directly, consider consulting an adviser for periodic reviews.
Documentation For Reviews
Gather your current policy documents before reviewing. Know what you have, what it covers, and what you pay.
Update your personal information: income, debts, dependents, and major expenses. This helps assess whether current cover is appropriate.
Note any health changes since you took out policies. These may affect your options for changes or additional cover.
Making Changes
Increasing cover is usually straightforward if you are healthy. You may need to provide updated medical information and pay higher premiums.
Reducing cover is easy and reduces your premiums. Ensure any reduction still leaves adequate protection.
Switching providers requires careful timing. Maintain existing cover until new cover is fully in place to avoid gaps.
Creating A Review Schedule
Set a reminder for annual insurance reviews. A consistent schedule ensures reviews actually happen.
Link reviews to other annual activities like tax time or your birthday. This creates a regular habit.
After major life events, review immediately rather than waiting for the next scheduled review.
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