When was the last time you actually looked at your insurance?
Not just checked that the premiums are being paid, but looked at what you have, how it works and whether it still reflects your life today.
For many people, the answer is probably “I’m not sure.” That's understandable. Insurance is often something we put in place and then get on with life.
But life doesn't stand still. Your circumstances can change significantly over a few years, while your insurance may remain exactly as it was.
Your life changes. Your insurance may need to change too.
Think about what can happen over time. You might buy your first home and take on a mortgage, have children and take on new responsibilities, or change jobs and move from one type of employment to another. Your income may increase as your career develops, or you might start or grow a business.
Your relationship circumstances might change. Perhaps you've separated, remarried or blended your family. Your financial commitments may also change as you take on new debt or build your assets.
What made sense when your insurance was first arranged may not necessarily reflect your circumstances today.
That's why a review isn't necessarily about getting more insurance. It's about checking whether what you have still makes sense for your current situation.
Buying a home
Buying a home is one of the biggest financial commitments many people make, and a mortgage can change the financial picture significantly. If your insurance was arranged before you bought your home, it may be worth considering whether your existing protection still reflects the financial commitments you've taken on.
Your mortgage isn't the only consideration. You may also have changes to your income, savings, family responsibilities or other financial goals. A review provides an opportunity to look at the bigger picture.
Having children
Having children can change your priorities almost overnight. Your financial responsibilities may increase, and your income may now be supporting more than just yourself. You may be thinking about childcare, education, your family home and creating financial security for your children.
The question becomes less about what you needed when your insurance was originally arranged and more about whether it still reflects the people who now depend on you.
Changing jobs or income
Your income is one of the foundations supporting your financial life, so if it has changed significantly, it can be worth checking whether your existing protection still reflects your circumstances.
A new role might come with a different salary, employer benefits or sick leave arrangements. You might have moved from being employed to being self-employed, or you may now own a business where your income depends heavily on your ability to work.
These changes can affect the role that personal insurance plays within your wider financial position.
Starting or growing a business
Starting a business can change the nature of your financial risks. You may become both the owner and the person the business relies on to operate. As the business grows, there may be additional employees, shareholders, borrowing and financial commitments.
Your business may also become a significant part of your personal wealth. That can create a connection between your personal and business protection, so a review can be an opportunity to consider whether the arrangements you have still reflect the role you now play within the business.
Taking on new debt
Debt can change over time. Perhaps you've increased your mortgage, taken out personal lending or borrowed money to invest in your business.
The important thing isn't simply knowing how much you owe. It's understanding what would happen to those commitments if your circumstances changed. Would your income still be available? Could your family continue meeting the repayments? Could your business continue servicing its borrowing?
A change in debt can therefore be a useful trigger to revisit your wider financial protection.
Relationship and family changes
Changes to your personal circumstances can also affect your insurance arrangements. Getting married, separating, having children or blending families can all change who depends on you financially and what you want your financial arrangements to achieve.
Your Will, insurance, ownership arrangements and wider financial planning may all be affected.
Sometimes the most useful review is looking at how the different pieces fit together.
A review isn't about finding something wrong
It's easy to think of an insurance review as someone looking for a reason to change your policies.
That's not the purpose.
Sometimes a review confirms that what you already have continues to be appropriate. Sometimes your circumstances have changed and adjustments may be worth considering. And sometimes you may discover that something you thought was covered isn't covered in the way you expected.
The value is in understanding where you stand.
When should you review?
There isn't necessarily one date that applies to everyone. Instead, think about life events.
A review may be worth considering when you buy or sell a home, take on a new mortgage or other significant debt, have a child, get married or separate, change jobs, experience a significant change in income, become self-employed, start or grow a business, become a shareholder, buy or sell a business, or experience a significant change in your assets or financial circumstances.
You don't necessarily need to wait for one of these events either. Sometimes it's simply been a few years since anyone has looked at your arrangements properly.
Don't just look at the amount of cover
A review isn't only about asking:
“Do I have enough?”
There are other questions worth asking. Do you understand what your policies cover? Who owns the policies? Who receives the benefits, where applicable? Are the policy definitions still appropriate for your circumstances? Have your income and financial commitments changed? Are there changes in your health or occupation that may be relevant? Do your personal and business arrangements still work together?
And perhaps most importantly:
Would you make the same decisions today that you made when the policies were first arranged?
Your insurance should reflect the life you're actually living
The person you were when you first arranged your insurance may have been in a very different position from where you are today.
Perhaps you had no children, were renting, had a different job, earned less or hadn't started a business. Years later, you may have built a home, a family, a career, a business and significantly more financial responsibility.
Your insurance shouldn't necessarily stay frozen in time simply because your circumstances have changed.
A review is an opportunity to make sure the protection you have still reflects the life you've built.
Protecting what you've built
Insurance is only one part of a wider financial plan. But as your life changes, it's worth checking whether the role your insurance plays still makes sense.
You don't necessarily need more cover. You may not need different cover. You may find that what you already have continues to meet your needs.
The point of a review is to understand that.
Because you've spent years building your income, home, family, business and financial security.
Your circumstances have changed along the way. Your protection deserves the opportunity to keep up.
If it's been a while since you reviewed your insurance, or you've recently experienced a significant life change, it may be worth taking another look at your arrangements. At New Vision Financial Services, we can help you understand what you currently have, how it fits with your circumstances and whether there are areas that may warrant further consideration.
Nimalka Perera
Business Development Manager
New Vision Financial Services
Plan your future and let us help you have peace of mind along the way.
