So, you go to the trouble of filling out the forms, answering the multitude of medical questions and setting up a direct debit to hand over your hard-earned cash to one of the life insurance companies each month, but what exactly do you have and is it good value? The following points should help you understand what is best for you and why you should review what you have!
- People change
Assuming the advice when you commenced your life cover was good, it should have based the type and level of cover on a combination of the financial loss that would be suffered in the event of your and/or your partner’s death and your affordability. But what was appropriate then may have changed significantly. Your mortgage may be less (or more), children will be older, you may have changed jobs and no longer have a death-in-service benefit linked to a pension. These and other factors could mean that any plans you have in place may need to be updated. - Cost
If you arranged your life cover directly with one insurance company or a bank, they may have only been able to show you their products (and hence, their premiums!) so you could be paying over the odds for whatever you have. Other factors such as the Gender Directive in December 2012 or simply the competition between life companies, could mean that it is possible for you to reduce your monthly premium without compromising on the quality of cover. - The jargon
Is it “dual” or “joint”, “level” or “indexing”, does it have a “conversion option” what additional benefits does it include? There is an array of different types of cover to suit different needs. If it’s been a while since this was all looked at, it’s worth taking the time to make sure that the type of cover is the most appropriate for you and your family’s current circumstances. - Ratings and Exclusions
For some reason, either due to occupation or medical situation at the time, you may have been “rated” or charged a higher premium than normal, or had certain exclusions apply to your plan. Depending on your current situation, sometimes it is possible to arrange cover without these ratings applying any more, or else have a rating that is not as severe. It’s worth enquiring to find out. - Given up Smoking
If you were priced as a smoker when you commenced a plan but have since given them up (and have been off them for at least 12 months) this can be one of the biggest factors in calculating your premium. In some cases, premiums can reduce by up to approximately 50%! If this is the case, it is well worth getting up to date quotes.
Dave Kavanagh QFA has been a Financial Advisor for over 20 years (and a Gym Instructor/Nutrition Advisor before that!) 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.
