How to be in touch with your cover

When did you last go over your cover? With any personal insurance, it can be tempting to set and forget, but it’s important to understand what you have, and how it can be used. That’s also one of the (many) good reasons why we welcome you to book an insurance review with us.


Here are some key things to look for when reviewing your cover.


Know your policy

Options, exclusions, wait periods, excess… There are a lot of details that go into an insurance policy, and especially if it’s been a while since you took out insurance or reviewed it, you may not remember what’s covered and what’s not.


This is why a regular insurance review is valuable – it can be a simple reminder of what you can claim on and get nancial support for, as well as an opportunity to check that your insurance is still appropriate for your changing needs.


What the wait period is

Some types of insurance (e.g. income protection) have a speci ed waiting period, which is the amount of time that you will have to wait (unable to work) before the insurer starts to pay out after you claim on your policy.


Knowing this detail is key because the longer the wait period is, the more savings you’ll likely need to cover expenses before the claim becomes payable. In some cases, you can adjust the wait period on your policy, for example if you’ve managed to increase your emergency funds. This may allow you to save money: the longer the wait period you choose, the lower your premiums will likely be.


What’s excluded

At the time of applying for insurance, the insurer asks about any medical issues you may have or have had in the past. They then use this information to tailor your cover to your situation, and apply certain ‘exclusions’ and/or ‘loadings’ to your policy.


Depending on your policy, certain medical conditions, risky jobs, hobbies or habits may not be covered. These are called exclusions and are mostly permanent, but some can be temporary and may be reviewable, for example because you have quit a risky hobby or changed job.


On the other hand, certain habits or conditions may be covered by your insurer, but with an additional charge – called loadings. Similar to exclusions, some loadings can be reviewed. If you used to be a smoker when you applied, and it’s been at least 12 months since you quit, you can ask the insurer to get the ‘smoker premium’ loading removed.


Not sure if your exclusions or loadings can be reviewed? Get in touch, we can help you explore your options.


Your contribution at claim time

When you take out health insurance, you can select the excess, which is the amount you choose to contribute towards each claim.


Knowing the excess stated in your policy is key, as your payout will only cover anything above that amount. Plus, if you think that you can afford to pay a little more out of pocket at claim time, then upping the excess can reduce your premiums (and save you money in the long term).

Being proactive with claims

In New Zealand, the insurance industry pays out over 1.4 billion claims every year on average, which really goes to show the value that insurance brings to Kiwis’ lives. So, to make the most of your insurance, it’s a good idea to have a proactive ’claims mindset’. Whenever you have any questions about your insurance or a claim, always reach out to us and ask. Sometimes, simply asking can make the difference between receiving a payout and missing out on a claim.


Insurance policies can be a long read, but taking the time to familiarise yourself with their details is time well spent. Like to review your cover? We’re here to help.


Sources:

The problem of underinsurance – FSC


Spotlight on Insurance – September 2020

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.



Protect Financial Services Limited is an Authorised Body and Dean Picard is financial adviser: FSPR Number: 76981. We provide financial advice under the licence held by FutureSense Limited, issued by the Financial Markets Authority (FMA). Please visit https://www.protectfinancial.co.nz/disclosure-statement for more information and Disclosure information.