When Should I Review My Insurance?
Natural disasters are a common event in Australia, whether it’s a bushfire, flood, storm, or cyclone, natural disasters can hit at any time. That’s why it’s always a good idea to check your insurance cover regularly. It’s not just about your home and belongings, it’s also about your income, your health and your ability to recover from a serious setback.
This blog will consider why reviewing your insurance matters, the types of personal cover that are available, and some common life events that could mean it’s time for a review.
The Problem with Being Underinsured
We have all seen the news reports of families with homes damaged or destroyed due to a natural disaster, facing the loss of what took years to build. The situation becomes even more challenging when they realise their insurance cover isn’t sufficient.
The two common ways that people can be caught out:
Uninsured: No cover at all
Underinsured: There is cover in place, but it’s not enough to replace what is lost
Many people don’t realise their home, contents or personal cover is out of date until an event occurs. It may be due to a renovation, purchasing new furniture or their income has gone up. If the policy hasn’t been updated, it may not match their current situation.
Insurance Is About More Than Just Your House
When people think of insurance, they often think about their home, car or belongings. But there is another side to insurance, protecting you and your families financial wellbeing when life throws something unexpected your way.
There are four main types of personal insurance that are worth understanding:
Life Insurance
Life cover pays a lump sum to your family or nominated beneficiary if you pass away.
Why it matters:
It can help cover debts like a mortgage or provide ongoing financial support to your loved ones. If something happens to you, it can give your family time to grieve without the stress of worrying about money.
Total and Permanent Disability (TPD)
TPD insurance provides a lump sum if you are permanently disabled and are unable to return to work.
Why it matters:
Living with a permanent disability can lead to big lifestyle changes, like needing to renovate your home or stop working altogether meaning a loss of income. TPD cover can help reduce the financial pressures during that time.
Trauma
Also known as critical illness insurance, trauma cover pays a lump sum if you are diagnosed with a serious medical condition such as cancer, stroke or heart attack.
Why it matters:
A major health event can cause financial stress. Trauma cover can help you take time off, access treatment, and recover without financial stress adding to the pressure during your recovery.
Income Protection Insurance
Income protection pays you a portion of your income if you’re unable to work due to sickness or injury.
Why it matters:
Your ability to earn an income is one of your biggest assets. If that is taken away, even for a short time, income protection helps to stay on top of bills, mortgage repayments and cost of living while you recover.
Life Changes That Trigger an Insurance Review
Insurance shouldn’t be a set and forget. Life changes occur frequently, and what may have worked a few years ago may not be suitable now. Below are some common life events where it makes sense to review your cover.
Buying a home: A home is likely one of your biggest financial commitments. Whether you’re a first home buyer or upgrading, it’s a good time to think about what would happen if you couldn’t make repayments.
Getting Married or Starting a Relationship: When two people build a life together, financial decisions become shared. It might be time to make sure your insurance reflects your new circumstances.
Having Children: If you have become a parent, consider what your family might need if you were no longer able to work.
Changing Jobs or Starting a Business: New job, pay rise and career shifts are all good reasons to recheck your cover. If you have started a business, it might be a good time to check how you’ll protect your income and responsibilities if you get sick or injured.
Kids Growing Up: As your children become more independent, your priorities might change. This could mean reviewing your life insurance and other types of cover
Nearing Retirement: As retirement approaches, your needs for some types of cover may reduce, while others become more important. It’s worth checking that your cover aligns with your current stage in life
How Often Should You Review Your Cover?
A good rule to follow is to check your insurance once a year or anytime a big life event occurs. Setting reminders at renewal time or when you complete your annual tax return.
Some questions to consider when reviewing the cover:
Has my income changed
Have I taken on new debt
Has my family situation changed
Is my cover still affordable
Does the payout still match my needs
Life is full of change, and insurance is there to help protect what matters most when the unexpected happens. Whether it’s your home, income, health, or your family’s financial future, having the right cover can provide peace of mind and security.
After working as an advisor for a decade, Joel founded Unified Wealth.
Unified Wealth specialises in helping clients who are facing life’s big decisions.
Whether you’re contemplating your first property, growing your family or starting your investment journey we can help you focus on the simple steps to help you make your goals reality.
Our priority is making sure you have all the right information available to make the best possible decisions for you and those you love.
Our company values are:
Unity - We are most effective when we work together as a team
Trust - We are trustworthy and act in your best interests
Transparency - We are honest and communicate openly
Education - We are committed to lifelong education
At Unified Wealth our team are highly experienced and provide goal-based advice and solutions for a range of advice strategies.