Life moves fast. Is your insurance up to speed?
Life rarely stands still. A new home, a growing family, a career change or the transition to retirement can all have a significant impact on your insurance needs.
Yet insurance is often one of those financial arrangements that gets filed away and forgotten. Over time, that can leave you underinsured, paying for cover you no longer need, or relying on arrangements that no longer reflect your circumstances.
That’s why it’s worth checking your insurance annually to make sure it still fits your life.
When life changes, check your cover
Many people take out insurance and then rarely look at it again. But the amount of cover that was appropriate five or ten years ago may not be suitable today.
Consider some common life events:
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Buying, building or renovating a home
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Getting married or entering a new relationship
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Having children
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Separating or divorcing
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Taking on a larger mortgage
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Starting or selling a business
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Approaching retirement
Each of these milestones can change both the level and type of insurance you need. For example, a growing family may require increased life insurance to protect loved ones financially. Conversely, someone who has paid off their mortgage and whose children are financially independent may find they need less cover than they once did.
Check your valuations
One of the most common insurance mistakes is failing to update valuations.
Property values and replacement costs have risen significantly in recent years. Construction costs, building materials and labour expenses may mean that rebuilding a home after a major loss could cost far more than expected.
The same applies to contents insurance. Think about how many valuable items may have been added to your home over time, such as electronics, furniture, jewellery, sporting equipment or appliances. A quick estimate made years ago may no longer reflect the true value of your possessions.
Business owners face similar challenges. Equipment, stock, technology and business interruption costs can all change substantially over time.
A regular review can help identify potential gaps before they become costly surprises.
Are your beneficiaries still the right people?
Life insurance and superannuation death benefit nominations deserve particular attention.
The people you intended to benefit from your insurance years ago may no longer be the people you would choose today. Marriage, divorce, the birth of children, blended families and changing personal circumstances can all affect your wishes.
Reviewing beneficiary nominations regularly helps ensure your proceeds are directed according to your current intentions rather than outdated paperwork.
This is especially important after major life events. An old nomination that no longer reflects your circumstances can create unnecessary complications and stress for loved ones at an already difficult time.
Don’t forget income protection
Many people insure their home, car and contents, yet one of their most valuable assets is often their ability to earn an income.
Income protection insurance can help replace a portion of your income if illness or injury prevents you from working. As your salary, expenses and financial commitments change, it makes sense to review whether existing cover remains appropriate.
If you’ve recently received a promotion, changed careers, become self-employed or taken on additional financial responsibilities, your current level of cover may not provide the protection you expect.
Review your premiums and policies
Insurance products evolve over time and so do premiums.
A review may reveal that you’re paying for features you no longer need or that changes in your circumstances mean you require additional cover. It can also help you assess whether you’re receiving good value for the premiums you’re paying.
But it’s important not to focus solely on price. A cheaper premium may come with reduced benefits, stricter conditions or exclusions that limit protection when it’s needed most.
The goal is not necessarily to find the cheapest policy but to ensure you’re receiving appropriate value for the cover you have.
Major life events are a natural trigger to revisit your insurance. Even if nothing significant has changed, it’s worth checking your cover each year to make sure it still reflects your needs.
The best time to review your insurance is before you need it.
If your circumstances have changed or you can’t remember the last time you checked your cover, speaking with your financial adviser can help identify any gaps, overlaps or opportunities to update your protection.