Why should you do an insurance review? 8 reasons

Insurance is a financial product that we often use for many years. As they are meant to make our lives safer and more comfortable, it is worth choosing them wisely and reviewing your current policy from time to time. In today’s article, we take a look at the insurance policies already in place and point out some reasons why you should do a review of your products.

The cost of living is still rising

Prices are still rising, and the cost of living remains a pressure for many households. Insurance premiums, for example for private medical insurance (PMI), are a regular cost, so it is worth checking that each policy still offers good value. Of course, the price of policies depends on their coverage. You may be able to find a cheaper policy with similar cover, but check exactly what would change before you switch.

In my opinion, the rising cost of living is already reason enough to do a review of policies, especially the more expensive ones. However, if this doesn’t convince you, let’s move on to the next reasons.

Review at Extend Finance is free of charge

An insurance broker can help you compare cover.

You do not pay Extend Finance any fees for reviewing your insurance needs, providing insurance advice or arranging a policy. If you take out a policy through us, we receive commission from the insurer. You only pay the insurance premium for your chosen policy.

Your living situation may have significantly changed

Insurance companies check many details when they price your policy. There are plenty of criteria taken into account and most likely not all of them are public, but some of them are common knowledge.

Life insurance

For a life insurance policy, companies take into account, for example:

• Your lifestyle (smoking, drinking alcohol)

• Your work and hobbies

• Your age

• Your medical history and family health history

• Your height and weight

The price is also affected by:

• The sum insured

• The duration of the policy

• The coverage that insurance provides

Source: www.unbiased.co.uk

Home insurance

When it comes to insuring a property, the most important factors include:

• The location of the property

• Coverage of the policy

• Sum insured

• Type of property

• Quality of security devices

• Risk of flooding in the area

• Your insurance history

• Type of insurance (buildings or contents)

Source: Ageas

Income protection

Your income protection premiums depend on:

• Age

• Smoking

• Your occupation

• Medical history

Although age is a major factor, you can do a lot to ensure that your income protection is not too expensive. For example, smoking and a higher-risk occupation can significantly increase premiums. Of course, how much they matter varies between insurers and individual circumstances.

If your life has clearly changed, for example you have got divorced, had a baby, stopped smoking or moved to a different location, an insurance review may be very beneficial.

Insurance companies’ offerings are constantly changing

The UK insurance market changes often, and new products and features appear regularly. Companies are changing their offerings all the time and, as a result, a product that was paid for just two years ago may no longer be the best fit or value today.

There are also products emerging that are more suited to your current needs.

Your premiums may rise at renewal

Premiums can rise at renewal, and your insurer will not necessarily point out other options that may suit you better. Reviewing your policies regularly, on your own or with a broker, helps you check you are not overpaying.

An insurance review can help your monthly budget before a mortgage

In one of our articles we wrote about affordability, which is the amount you can afford to pay towards your mortgage instalment. When planning to buy a property, it is worth taking care of your personal finances: cancelling unnecessary subscriptions, increasing your income and optimising your spending can help you save. Reviewing your policies is a logical part of this, as cutting unnecessary costs may reduce your monthly outgoings, which lenders look at when assessing affordability.

Insurance bundling

Insurance bundling is literally selling different policies together. When you buy a home, you may need life cover, critical illness cover and buildings insurance. Mortgage lenders normally require buildings insurance. It should come as no surprise to anyone that insurance companies sell many different products and want to encourage customers to take advantage of their entire range of products, for example by giving discounts to customers who buy several policies.

Review is a great opportunity to talk with your insurance adviser

Possible benefits may include lower premiums, better terms and conditions or more convenient payment options. A consultation is also an opportunity to ask many questions about your policies. For example:

• Is it worth considering purchasing whole life insurance in my current situation?

• Can my current insurance be paid for on a different schedule? (annually, quarterly, monthly)

• Is it worth paying extra for specific package extensions?

Of course, not every question can be answered. A broker can explain how your policies work and what alternatives exist. It’s important to remember that everyone’s situation is different - a basic insurance policy for a 50-year-old can be more expensive than an extended package for a 20-year-old.

If you replace a policy, do not cancel your existing cover until the new cover has started, and remember that a new life or income protection policy is usually priced on your age and health at the time you apply.

We hope you found this article helpful. Feel free to contact our consultants, they will answer your questions and support you in choosing financial products that will best suit your needs. Do not hesitate! Fill in the form now!