Updated: May 31, 2020
Are you are paying for insurance, but are unsure of what you are covered for? Then, it’s time for you to review your insurance policies. If you are not familiar with insurance terms, get a professional insurance adviser to review & summarise your insurance plans for you.
Insurance policies purchased for personal and family protection fall into one of these five categories; life, disability, critical illness, long-term care and health insurance.
1. Your insurance plans aren’t covering you in the right areas
The amount of insurance coverage that you need evolves with your life stage.
It depends on factors such as your financial obligations (think housing loans), the number of dependents you have and how many years you’ll need to support them.
If you don’t have any dependents, it’s unlikely that you’ll need a high payout for death, though disablement protection will be of paramount importance.
2. Your insurance plans may have duplicate benefits
You may have two or more insurance plans with the same type of benefits.
Do bear in mind that for some benefits such as ‘medical expense reimbursement’, you can only claim from one plan.
3. You may be putting all your eggs in one basket
It is common for people to be paying high premiums for 1 or 2 insurance policies - usually Whole Life or Critical Illness plans, as these are the most highly marketed ones.
Retirement Planning and Income Protection are very important areas that tend to be neglected. If you are working on a limited budget, review your existing plans and consider how you could make adjustments to broaden your protection. Find out more about Income Protection.
4. You could be footing extra charges
Insurance companies have to factor in bank charges and other administrative costs for every payment transaction. If you have plans that are on monthly GIRO, find out if you could pay for them yearly instead. You’ll make some savings that way.
5. You may be missing out insurances that you need
Underwriting is stringent for many types of insurance plans, especially hospitalisation insurance plans. For applicants with health conditions, insurers usually mete out loading (charge more premium) or exclusions (not covering the particular health condition & related ones). Nonetheless, be selective & work within your means.