Six ways to manage the rising cost of insurance
Insurance is one of those products that you don’t truly appreciate until you need it. When the unexpected happens, it’s a desperately-needed safety net. But when everything in life is going along smoothly, watching your premiums rise each year can leave you wondering whether it’s money well spent. What you might not realise is that there are plenty of ways you can retain an adequate level of cover while minimising your premium costs. If the affordability of your insurance is causing you concerns, here are six options you might like to consider.
Adjust your level of cover
As you move through life, the level of cover you need will fluctuate. For example, when you have a young family and a large mortgage, you’ll need more life insurance than a retired couple with adult children and a freehold home. Changes in income levels may mean that you no longer need the same level of income protection or redundancy cover – such as one person moving from full-time to part-time employment. Perhaps you are simply insured for more than you really need. By reducing the amount that your policy will pay out, your premiums will fall accordingly.
Opt for a longer waiting period
Insurances such as income protection or mortgage repayment insurance often have a stand-down period between when you claim and when the benefit becomes payable. Normally, this starts at four weeks, but by extending your waiting period to eight or thirteen weeks, you’ll reduce your policy’s premium.
Choose a shorter benefit payment period
For insurance that offers regular payments over a period of time (e.g., income protection), you can lower your premiums by selecting a shorter benefit payment period. If your policy is currently set to pay a benefit right up to retirement age, you can opt to limit your payout to a maximum number of years – typically one, two or five, in order to make some savings.
Select a higher excess
Health, house, contents and vehicle insurance all have a standard excess, which is the initial amount you have to pay when you make a claim. In most cases, there are higher excess options that you can choose to adopt. Being prepared to spend a little more at claim time means that your regular premiums will be cheaper.
There are plenty of insurance providers in New Zealand, all offering similar products. However, pricing may vary from one company to another. So, if you feel that your existing insurances are just too expensive, and your health hasn’t changed since you took them out, then check what else is on offer. You might find an insurer with a price range or product that suits your requirements better.
Perform an annual review
Because life is constantly changing, the best way to ensure you’re not paying too much for your insurance is to sit down with an experienced adviser each year to review your current circumstances. At Keystone, not only will we make sure that you’ve got the right insurance for your needs, but we’ll help you manage any changes to ensure you’re still covered for the things that are most important. Give Keith a call today to see how much you could save on your insurance premiums.