Why Reviewing Your Insurance is so Important

Oct 11

Life and Health insurance allows us to plan for the unexpected. By identifying the risks we face in life we can then choose what risks we wish to protect ourselves against, by getting insurance cover, and those risks we are happy to face. 

Most clients who have a mortgage and other significant assets are aware of the importance of having adequate life insurance but understanding what you are NOT covered for is equally important. For example we tend to insure only those things we can’t afford to replace, however, many of us don’t identify our greatest asset – our ability to earn an income – as something to insure.

Most clients have life insurance. However, when we ask them a few more questions it is often apparent that not only is the level of life insurance inadequate for the client’s circumstances, but they also do not know how the amount of cover they currently have in place was arrived at. In addition they are often unaware that they face several other risks that they could be protected against if they had the right insurance in place.

For example, life insurance will cover you in the event of your death – and not before then. If you suffer a serious illness there could be a long period where you are unable to work, which could make meeting your mortgage repayments and providing funds for day to day living expenses very difficult. So if a client is only protecting the chance of them leaving a partner and children with a mortgage should they die unexpectedly, we would also recommend that it is important to cover a period of illness where they may not be working, but the mortgage and other living expenses still need to be paid.

Reviewing your insurance cover regularly is so important. Many people who may have taken out a policy several years ago may feel that they have sufficient protection in place, however, circumstances change such as taking on more assets, having children and so on. Therefore it is important that insurance is reviewed every few years to make sure that it still meets your current needs and to make sure that changed circumstances have not resulted in the level of cover becoming inappropriate for your needs. Don’t just file the policy documents away to gather dust!

Your Mike Pero adviser can help you make decisions about what insurance is available, what is being covered and what is not being covered, they can also help you prioritise the type and amount of cover that is important to you so that you can make a better and more informed decision.

So if you have life insurance but you have not reviewed it for some time give us a call at Mike Pero Insurances on 0800 500 123 to find out how you can better protect yourself and your family if something unexpected happens.