How often should I review my insurance policies?
When did you last look at your insurances? If your answer is something along the lines of ‘geez, it was way back when the kids were still in nappies’ then chances are you’re due for a refresh!
Our latest blog explains why it’s vital to keep reviewing your personal and business insurances every year, and provides helpful tips that will ensure you get the best out of your review.
Why is it so important to review your insurances every year?
If you’ve got life or health insurance policies already in place, you may have assumed you’re set for life.
In fact, while setting up insurance policies to protect yourself and your loved ones is critical, it’s equally vital to review your policies every single year. That’s because every policy holder’s circumstances are constantly changing – and your insurances need to be updated to reflect those changes.
In other words, if your policies are outdated and you need to make a claim there is a chance that your insurance may not provide as much cover as you need.
It’s also important to bear in mind that the benefits offered on policies are being constantly updated by insurers, so an annual review will ensure that you are benefitting from these updates.
Common changes in lifestyle and circumstances that may affect your personal insurances
Some of the most common changes that may affect your personal insurance policies are:
Changes to a family situation, for example having children
Getting a new job, or re-entering the workforce after a break
Starting a new business, or selling an existing one
Buying a new home or taking on increased debts
These are major life events that will have a direct impact on your financial situation, and the amount of cover that you need to put in place to protect yourself and your family.
Ideally, you would update your insurance in anticipation of one of these events, however we know that this can often slip to the bottom of people’s ‘to do’ lists. That’s why an annual review is vital – it is a chance to look back at what’s changed in the last 12 months and update your cover accordingly.
If you’re a business owner, make sure you’re looking at your business policies too!
If you’re a business owner, you’ll know that no year is the same! Most businesses are constantly evolving and growing, which means insurance needs are likely to be changing too. Having appropriate business insurances in place is an integral part of building financial security and resilience into your organisation.
The kinds of changes that often affect how business insurance is structured include:
Changes in business debt – new loans or repayment of existing loans
Changes to shareholders and/or directors
Addition/removal of key people within your business
Significant changes in revenue/profit
Again, talking to your adviser or insurer in advance of any changes coming to fruition is the best way to protect your business and key assets. However, if you’ve been caught up with the day-to-day of running the business, scheduling in an annual review is a safeguard that ensures important updates to your cover are put into place regularly.
How to make sure you remember to review your insurances each year
If reviewing insurances is something you just keep forgetting about, don’t feel bad – there are many Kiwis in the same boat as you! Here are some ways to make it easier to remember (and prioritise) this important
Set an annual reminder in your calendar: Set a date in your calendar once a year to have a think about whether anything’s changed in your life or business that might affect your insurance needs (ideally about one month before your policy is due for its annual renewal). You should only need half an hour to do this, and anything you think of can be jotted down in an email that you send to your adviser or insurance company.
Tie it to another event: Do you have an annual planning day in your business? Or, for personal insurances, perhaps you and your partner spend time once a year on planning your budget for the year. Tying a quick review of anything that might impact insurances into recurring annual event like these is a great way to make sure you don’t forget!
Use an insurance adviser: While most people don’t want to spend hours reading over insurance policies to work out which is the best cover for them, an insurance adviser is quite the opposite – and that makes them worth their weight in gold! When you choose to arrange your insurances via an adviser, one of the benefits is that they will contact you each year (before your policies renew) to see whether anything has changed that might impact your cover. If you do need to make changes, they’ll also do all of the legwork to ensure you have the best policy in place going forward – win-win!
Plus4 is a nationwide network of registered financial advisers, specialising in personal and business insurances. What makes us different is our focus on understanding your unique circumstances, needs and goals so we can put in place insurance solutions that fully protect everyone and everything that is important to you. Interested in finding out more about how we can help you keep your insurances up-to-date and optimised for your circumstances? Your nearest adviser will be happy to help – you can find them here.