As consumers we are becoming seriously savvy when it comes to reviewing and switching our car insurance or energy provider. Chelsea Warren, Protection Adviser at Alexander Hall, explains how it could pay to do the same with our protection insurance.
When it comes to reviewing general insurances such as your car or contents policies, it is likely that you review your options every year or so.
You receive a renewal notice and the first thing you do is shop around to see if you can save some money, or perhaps look for a different cover that is better for you.
It is important to review your personal protection plans with this same regularity – especially when your circumstances change or you experience a life event that may alter your needs, which tends to happen often.
If you do not review your protection cover on a regular basis, you could end up paying too much for a policy that no longer suits your needs.
On the other hand, you could be paying too little and therefore not receive the amount of cover you need for your changed circumstances.
There are endless reasons as to why someone might need to review their protection cover, but for now we will consider several life events that could have a direct impact on your financial future and therefore should trigger the need to review your protection needs right away.
Buying your first home, or moving to a new property
If you move house, whether you are moving for more space or even downsizing, it is likely that your existing cover will no longer be fit for purpose.
You may, therefore, need make changes to the term of the cover and of course the amount of cover you have in place as when you move home, it generally means the size and the term of your mortgage will change.
When your family grows
If you get married or have children, your priorities are likely to change and therefore your need for cover will change.
Perhaps in this scenario cover just for the mortgage is no longer sufficient. You’ll want to ensure that if anything happens to you, the costs of raising a child (school fees, clothing, food etc.) can still be met.
Changing jobs
The benefits you receive from your employer will have an impact on whether you have the right amount of cover in place or not.
For example, if your sick pay entitlement changes the safety net you have in the event of an illness changes and you may be under protected.
Alongside this, any alteration to your income is another reason to review your protection cover, especially if you have income protection in place.
Changes to your health
If you had health complications in the past that you have now been treated for, or if you have stopped smoking since taking out your policy, or have taken up exercise to reduce your BMI, you could be eligible for more cost effective premiums or a more comprehensive policy when compared to the cover you have put in place previously.
If you would like more information on what different protection options are available, please click here for a detailed overview on our website.
What is considered when you review your existing cover?
Any protection review should be carried out by a professional protection adviser who can guide you through what your changes in circumstances mean to your need for cover.
A protection adviser can review your circumstances – such as mortgage debt, number of children, household savings etc – and determine whether the cover you have is still fit for purpose, or whether you should consider making changes.
In some cases the advice might be to reduce your cover – you want to make sure you are not over insured as much as you are not under insured.
Why you should review your cover, even if nothing has changed
Even if your circumstances haven’t changed, the protection market might have. We regularly see providers change their pricing on their policies.
Just like interest rates reducing on a mortgage product, life cover or income protection premiums could also come down over the course of a couple of years.
You might be overpaying for a cover without realising it, so it is always important to speak to a protection adviser to check you have the best price.
It is also important to consider how the quality of the contracts being offered by providers are also improving, coupled with new providers entering the market that might be better for you.
For example, a new provider now offering a life insurance cover with a market leading terminal illness benefit, or an improved Critical Illness contract that now offers a private GP service to you as a standard part of the policy. You could be missing out on not only more competitive pricing but also superior cover.
How to get the advice you need
If you are unsure as to whether your existing cover is still right for you, or you have not reviewed your cover in a while, it is essential that you speak to a member of the Protection Team at Alexander Hall and we can advise you on what is best for you.
We can discuss your circumstances and any changes you have made in the recent years, review the current protection market and provide you with independent protection advice, tailored to your needs.
If you don’t have any protection at all then perhaps now is a good time to speak to us and we discuss your needs and provide you with a recommendation.
The cost of life cover and other protection is often much cheaper than you may think. You can try out our life insurance cost estimator and see for yourself.
If you would like to arrange an appointment or you have any queries on Protection, you can email me on: [email protected]. Alternatively, use the 'Contact Us' page on our website – click here.
This article was originally posted in What Mortgage online. You can see the original article here. Please note this will launch a new web page.
