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.

UK inflation is still high

Although inflation is slowly falling in the UK according to the latest news, the rising cost of living is causing problems for many of us. According to 2023 figures, the average annual cost of private medical insurance (PMI) in the UK was £1,033, which is a few per cent of statistical income. Of course, the price of policies depends on their coverage, but very often you can choose a slightly cheaper option without compromising on the quality of your insurance.

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

As an insurance broker, we do not charge a fee for reviewing our clients’ policies. Of course, we do not do this for free - our company earns money by brokering products. Such a model, by the way, is very beneficial for the client, as he or she does not incur costs either during the review of his or her existing insurance or at the purchase stage. This is because we take commissions directly from the companies that provide them.

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 family health history and your

• Your gender

• Your driving history (this does not apply to all insurers)

The price is also affected by:

• The sum of insurance

• 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

• Amount of insurance

• Type of property

• Quality of security devices

• Risk of flooding in the area

• Your insurance history

• Type of insurance (building or content)

Source: Ageas

Income insurance

Your income protection premiums depend on:

• Age

• Cigarette consumption

• Your occupation

• Medical history

Although age actually matters most, you can do a lot to ensure that your income insurance is not too expensive. For example, smokers pay 50% higher premiums and high-risk professions pay up to 127%. Of course, these are just statistics and the differences can be both much larger and smaller.

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

Although Extend Finance exists for a long time, we are constantly fascinated by how often things change in the UK insurance market. Companies are changing their offerings all the time and, as a result, a product that was paid for just two years ago may be mediocre at best or simply expensive today.

There are also products emerging that are more suited to your current needs. For example, we care less and less about protection related to the aftermath of a pandemic because, we feel, coronavirus has become a thing of the past. On the other hand, clients are increasingly thinking about income protection in the event of a layoff (unemployment insurance) because the economic forecasts are not as optimistic as they were two years ago.

Your insurer will mainly remember about increases

Unfortunately, practice shows that insurance companies always remember to raise your insurance premiums, but not necessarily to inform you of more favourable options. The only way to counter this is to review your policies yourself, which our agents can help you with.

Insurance review can help improve your creditworthiness

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, be sure to take care of your personal finances- extinguishing unnecessary subscriptions, increasing your income and optimising your spending will help you save. It probably goes without saying that reviewing your policies is a very logical move in this case.

Insurance bundling

Insurance bundling is literally selling different policies together. It is very common that you need both life cover, critical illness cover and, at the same time, the property insurance that your lender requires. 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.

You can read about the pros and cons of bundling in this article.

Review is a great opportunity to talk with your insurance advisor

In addition to the immediate benefits of having your insurance looked at (lower premiums, better terms and conditions, more favourable payment methods), a consultation is 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, but the chance of getting reliable information from a broker is much higher than if you educate yourself on the internet. 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.

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