For the majority of us, when the renewal notice for our personal insurance policy arrives, it is an eye-rolling event.  Invariably the regular premium increase further fuels the feeling that insurance is a necessary evil – something that we know we need to have but would rather not pay for.

The world of Personal Insurance which includes Life, Income Cover, Trauma (Critical Illness) and disability insurance, alongside Health (or medical) cover has become complicated.  There are lots of permutations as to the depth of the cover and there are various additional bells & whistles that can be added to a policy for added benefits on a claim. 

We believe there is a hierarchy of needs when it comes to insurance and work with clients to ensure that their covers suit their personal situation – this is not a set and forget solution though and so it is important that your policy is reviewed regularly to make sure it has kept up with your changing situation.

Dependents and Financial Obligations: If you have family who are depending on your income and if you have debts then life insurance should be a top priority

Income Stability: If your income is essential for maintaining your lifestyle, paying your mortgage etc. then income protection insurance is crucial

Health Risks: to protect against serious illnesses or permanent disability, trauma and total & permanent disability insurance can provide peace of mind by providing a lump sum which could reduce debt, replace income or pay for some medical treatment

Healthcare Costs: Medical insurance helps you get the treatment you might need when you need it

Generally, it is not in your best interest to change your existing policy provider as you get older, unless there is a specific reason why the current cover is no longer adequate, as your health has probably changed over the years.  But there are often some ways you can increase your existing cover to reflect your changed circumstances without having to have a new health assessment.  Examples might be an increase in your debt, marriage, divorce, birth of a new child, or a pay-rise and so it is important that you meet for a review regularly to assess what might be needed as there are time limits applied to have an increase without proof of health.   

Chasing cheaper premiums is also not a viable course of action as the cheapest on the market today might not be tomorrow.  Knowing that the insurer will pay a claim if needed, and that you have some of the best policy wording available for any specific areas important to you, is a better way of choosing your insurer.

If you do suffer some kind of medical incident, let us know!  It is surprising the number of people we catch up with who casually mention they were in hospital or broke a wrist and their particular policies meant that we could claim a small benefit for them.

Of course, keeping insurance premiums affordable is important and we will do our best to work with any constraints you have to help you have the most suitable cover within your means however, it might be useful to understand the factors that influence premium pricing, particularly for Health (Medical) policies.

Age  as we get older our risk of claiming, particularly on medical policies, increases

Medical Inflation: This is a significant driver. Medical inflation refers to the rising costs associated with medical procedures, medications, and technologies. As medical treatments become more advanced, they also become more expensive. 

Preventative Care: There is a greater availability of preventative care options and testing, which involves clients receiving more frequent screenings and diagnostics.

Reinsurance Costs: The cost of reinsurance, which is insurance for insurance companies, has been rising

Whilst in an ideal world none of us want to claim on a personal insurance policy, at G3 we also see the difference a claim can make by removing any financial stress or having treatment privately rather than having to wait in the public system.  Knowing you have the right cover can provide a real sense of security.

We email you every year with your updated schedule, offering a review – please make sure you take advantage of this, particularly as life changes and it is in your best interest that we know what has been happening.

Article by Jane Benton
G3 Financial Freedom Ltd

 

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