Most people are pretty savvy when it comes to ensuring their valuable possessions, like a car, house or boat, because not insuring them means taking a sizeable financial risk. In fact, around 95 per cent of New Zealanders are covered against loss due to disaster, accident or theft. But when it comes to life insurance, many have little or no insurance cover. Are you covered? Here are seven insurance mistakes you could already be making.
Not taking out life insurance
Simply putting off insuring your life means you may not be able to get the cover you need later on, because of an unhealthy lifestyle or existing health conditions. It’s an expensive choice to make that could end up costing you. Remember, it’s better to have insurance and not need it, than to need it and not have it.
Not enough cover
Often when deciding on life insurance cover, it comes down to how much you can afford. A good rule of thumb when deciding on how much cover you need is to work out what your family would need to survive if you weren’t around or weren’t able to work. Will your insurance provide you with enough to cover the cost of your mortgage repayments and still pay your family’s bills and daily needs?
Not insuring your partner
It’s important you plan ahead for any eventuality, and that means ensuring your spouse or partner is sufficiently covered in the event of death, disability or serious illness. Consider all of the situations that could impact your family and ensure you have a plan in place. For example, if your partner is diagnosed with a serious illness, you may need to take time off work to care for them. Your partner’s life or trauma insurance policy would cover your loss of income in this situation.
Not considering the extras
Again, it often comes down to what you can afford, but it’s a good idea to check what add-on benefits are available with your insurance policy, and consider whether or not you need them. Benefits like income protection, trauma insurance or disablement will cover you in the event you’re unable to work due to a serious illness. Life insurance cover for death will ensure your family is financially secure, but equally important is cover for unexpected events like illness or disability were you’re unable to work and provide an income for your family.
Not reviewing your policy regularly
After all, your circumstances change so your insurance policy needs to evolve too. Simply buying a policy and then forgetting about it, how much you’re ensured for and what it covers, could mean you end up with too little or even too much life insurance. At key stages throughout your life – marriage, buying a house, having children, a risky new hobby, or leaving your job – review your policy to ensure you’re covered sufficiently at every stage of your life.
Only buying based on price
While price is often the deciding factor for many people considering life insurance, there are a number of even more important factors to bear in mind. Policy quality, customer service, financial strength, and insurer’s reputation are equally important, particularly when it comes time to make a claim. Comparing life insurance quotes is tricky with much fine print and intricate details to consider. Get advice from an insurance adviser to ensure you have the right amount of cover for your needs.
Not shopping around
As with most things, it pays to shop around. Don’t assume the best deals can be found online; take the time to phone around local insurance companies too. Once you have a handful of similar policies, dig deeper to compare their specific products and benefits. Check for any extra discounts and ensure you understand the features of each policy so you’re comparing apples with apples.
Get yourself covered
Talk to a Mortgage Express insurance adviser about what’s right for you – they’ll help you avoid any nasty surprises and ensure you have the right amount of cover to fit your family’s needs.
