Change is the only constant in life, and as we move through life events and milestones we adjust and keep moving forward. But have you given any thought as to how changes in your life impact your insurance covers, and when you need to make changes?
At Plus4 it is important to us that you have the right insurance at the right level for each life stage – this includes making sure you are not over insured or paying for cover you won’t be able to use. To this end, we send out a letter every year to touch base with our clients to make sure their cover is still meeting their needs, but you don’t need to wait for the reminder.
These are the changes we see most commonly; however it isn’t an exhaustive list – which is why it is always key to speak with your adviser to discuss if a recent change is a reason to adjust your type or level of cover.
Have you increased or decreased your mortgage? Your mortgage is often a starting point for deciding how much life or income cover you need, so if you have dramatically reduced your mortgage or had an increase it is time for a review with your adviser.
If you have a new relationship, or have ended a relationship, there are a number of ways this can impact your insurance covers. For example – who owns your life policy? Is the person that will be receiving the pay out still appropriate?
If your teenager has left home, a new baby has arrived or a dependent parent has moved in these are all worth discussing with your adviser, to review whether your cover should be increased, reduced or structured differently.
If you move into a dramatically different occupation it is worth touching base with your adviser to see how this may impact your covers and premiums. Likewise if you become self-employed, or become an employee after self-employment the types of policies you have and the way they are structured are going to need a review.
If you have income protection, your premiums and pay out are based on your income, so a significant change means a discussion with your adviser is essential to make sure you aren’t disappointed should you need to claim.
A reduction in income may also mean you are struggling to pay the premiums and it can be tempting to cancel policies. Taking the time to discuss this with your adviser means you can work to find a solution so you can still have some cover in place.
Making changes to keep your cover up to date doesn’t need to be arduous. Most life insurance policies have a built-in ‘special events’ increase which means you can increase your existing cover, without further medical underwriting. The specifics vary between providers which is why it is important to discuss with your adviser, and discuss your future plans when you first get your cover in place.
Some providers also give you the opportunity to increase your cover on certain policy anniversaries or allow you to purchase a future insurability option, which allows further increases to cover each year without further assessment (up to certain limits).
Need to discuss whether your cover is still best meeting your needs? Call one of our advisers today.
Here are a few reviews from some of our existing clients around New Zealand