“Let’s not watch TV this evening, instead let’s open a bottle of wine and review our financial planning”, said NOBODY (well, hardly anybody) ever. There are certain activities we tend to put off and put off and put off. With some aspects of financial planning catering for eventualities that either may not happen, or else may not happen for a very long time, people can find it easy to justify putting off this important exercise. But what are the consequences of putting these things on the long finger? Well firstly, you could be paying too much. For a variety of reasons, the exact same (or better) cover that you have, could be available for a cheaper premium, saving you money each month that you can use for something else entirely. Next, any cover that you have in place should be appropriate for your own, specific circumstances. If anything has changed with those circumstances then what you have may no longer be appropriate (or the most appropriate). Jobs may have changed (and benefits that were attached to the job), income and expenditure may be different, family may have increased. These and more reasons could mean that different types and levels of cover are far more suitable.
One of the biggest factors that impact on cover is your health. It is understandable that people are more prone to consider their cover when there has been adverse health news, either for themselves or someone close to them. The problem with waiting until this happens is that it is often too late. The underwriting of an application could result in a higher than normal premium being charged or even a decline. Existing cover may not have a conversion option and you can be left stuck with something that expires with no option to continue cover.
Some of the regular findings we see during reviews, include: people paying for things that are no longer required (and sometimes they thought they had cancelled). People believing they have a certain type and level of cover when they do not. People having cover that their bank arranged and could not compare premiums and so they are paying way over the odds. People who only have cover on the “income earner” without realising that the financial loss that would be suffered in the event of a “non income-earner” with children, if they were no longer around or in full health.
Less than an hour spent once per year, can not only remind you what you have and reassure you that you have everything in place correctly. It could also result in you paying far less. Make the time to look at these important areas, it could be far more valuable than you think.
Dave Kavanagh QFA has been a financial advisor for over 20 years. He has done advice slots on on RTE 2FM and on TV3 and does the “Ask the Expert” Financial Advice section on Mumstown.ie For more information on this topic, just send an email and remember, with Financial Companion, there is no cost and no obligation to arrange a review. Contact us to find out how simple it is.