Reviewing your insurance policies? Don’t press cancel just to save a few dollars
It’s always good practice to run through your bank statements line by line and make sure you’re using everything you’re paying for. That monthly subscription to a fourth streaming service or that fancy gym might have seemed a good idea at the time – and they are, if you’re using them regularly (especially the gym, the fourth streaming service you might be able to do without).
There is one thing you’ll find when you run through your statements that you hopefully haven’t had to use – and that’s insurance.
It’s an anomaly in our world, really, in that it’s one of the few things – maybe the only thing – we buy and hope we never have to use. It’s there if things go wrong – if we get ill, have an accident or something’s stolen.
So it’s understandable that when we’re going through our bank statements looking for potential savings, we’ll put question marks next to those insurance debits.
Are they really worth it? Especially when you’ve been paying them for years and never had to use them?
The answer is a resounding yes. Insurance is your safety net. It’s there to seriously reduce the impact should the worst happen.
Could you drive your car on the freeway without your seatbelt on? Yes. Would you? Absolutely not.
But we understand that premiums can be expensive, so before you think about cancelling straight out, think about doing the following.
- Review what you’ve got
Do you have the right levels of insurance for what you need, and are you doubling up anywhere? Sometimes people have policies already wrapped in their superannuation that they’re not fully aware of and have taken out similar standalone policies. Do a review of everything you’ve got to make sure you have what you need – no more, no less.
- Make sure you are paying for your insurances in the most efficient way
Some policies, including life insurance and income protection, can be paid for out of your superannuation, making it a potentially more tax-efficient way of structuring your insurance.
- Compare prices – making sure you’re comparing like for like
It’s always good practice to compare your premiums with other insurers to be certain you’re getting good value for money – but just make sure you’re comparing like for like. There are so many variables, including loadings and exclusions, that what may appear to be the same at face value can be very, very different.
- Understand exactly what you’re covered for
In some policies, you may be paying for some additional benefits that you don’t actually need – so review what you’re covered for and if you need to trim the excess make sure you’re not cutting something critical.
- Take a premium holiday
If you really need to buy yourself some time and free up some cash, most insurers will offer a premium holiday. Unfortunately, this isn’t a freebie first-class trip to Europe, but hitting pause on your payments for a few months. You probably won’t be covered during this time, but it does ensure you keep your policy at the pricing you’ve agreed, and is a far better option than cancelling altogether. If you cancel your policy, you won’t just be able to pick up the same deal when you’re in a position to return.
If you’d like to get a handle on your finances and work out where you can find effective cost-savings without taking unnecessary risks with your future, speak to one of our advisors for a no-obligation consultation.
Our GPS program enables you to get full visibility on your spending, and allows you to take control of your finances and achieve your goals – whatever they are, and wherever you are on your financial journey.
We can also help you review your insurance needs, too.