When is the best time to reevaluate your insurance policies?
It is highly important to have insurance set up - for your home, contents, car and your life. But what life events should you use as a trigger to reevaluate your policies?
Here are some of the key times in your life that may encourage you to reevaluate the level of cover you already have set up.
Buying a new car
When you look at buying a car for the first time or upgrading to a new vehicle, it is crucial to shop around. It is the best time to see if you could be entitled to a cheaper or more comprehensive deal.
If you're upgrading from your small run around to a newer model, you may wish to consider a comprehensive car insurance policy rather than third party insurance.
Third party car insurance covers you for any damage you cause to other people's insurance but does not cover any issues with your own vehicle.
Comprehensive car insurance, on the other hand, provides you with a broader range of coverage.
This means you wouldn't need to worry about forking out for any unnecessary costs should you be involved in an accident.
An engagement ring is worth a pretty penny, so it could be worth looking at your contents insurance as you may want to add additional insurance to cover this pricey item.
Moving in together and getting married
Heard the saying "what's yours is mine"? When you get hitched you will be pooling your resources. This could be a great time to look at combining your home and contents insurance, to ensure both your possessions and your partner's will be covered if something were to happen.
At this time you may also want to reevaluate your life insurance policy as you could name your partner or spouse as your beneficiary - nobody really wants to have this conversation with their loved ones, but it is best to have this chat before an emergency strikes.
Buying a house
While it is obviously the right time to consider your house insurance when you purchase a new home, you may also find it a helpful reminder to update your contents insurance to include any new purchases.
Often you can combine your house and contents insurance into one package which could save you money.
Any changes you make to your home such as remodelling, or expanding your home, you will need to make sure your home insurance reflects the new value.
If you add a new security system your home will be at a lower risk or a burglary. As a result, you may be entitled to a lower rate on your insurance as this reduces the risk of a payout being required.
Once you begin to expand your family, there will be more people depending on you. This could be the perfect time to look at your life insurance.
You may want to add your children as beneficiaries as well as your partner or spouse so they will be covered if something happened to you. It might also be important to increase your coverage so their university fees would be covered.
If you split from your partner, it could be worth reevaluating your insurance policy - whether it be your car, house or life agreement, you will likely need to remove your partner's name from the documents.
Alternatively, you may decide to sell your home and reinvest the funds. No matter what choice you make, ensure your insurance policy is changed to reflect the new differences.
This also includes provisions for child support payments to continue after the event of a tragedy, so the parent left will not be solely responsible for any costs involved.
If your debt levels change or your salary increases, you may want to take another look at your insurance policy.
One example is if you pay off your mortgage early. Your life insurance may have been set up with enough provisions to cover the excess debt in the event that you couldn't and once that debt has been taken care of, you might be able to reduce your coverage.
Similarly, if you change jobs, you may get a pay increase, which means you'll need to readdress your life insurance policy.
This is important if you have family that depend on you financially as you will want to ensure their futures are protected.
Once you hit retirement it is still essential to maintain an adequate level of coverage, particularly if you could be leaving children or a partner behind.
Even if your adult children or partner could live comfortably if you were to pass away, there could be other costs involved such as the cost of health care or funeral fees.
You'll want to ensure your family members are able to recoup any financial costs after you pass away.
Posted by Tim Wolfenden.