12 Questions to Ask when Reviewing Your Life Insurance Coverage

Policy review

I recently came across an article about an expectant mum who found out she had stage 4 cancer at age 33. Feeling the unpredictability of life, I’m compelled to write this piece.

Reviewing your life insurance coverage is a crucial part of financial planning and there are some key questions to ask to ensure you still have the right policy in place at the right cost.

Getting started: what you need

  • A copy of your original life insurance policy illustration
  • Summary of the policy features and benefits

Your current policy and circumstances

  1. Is my life insurance policy still in force?
  2. What type of policy is it? For example, term insurance or whole life insurance
  3. Have my needs changed?
  4. Is this still the right type of policy for my needs?
  5. Do I need more or less life insurance cover than I currently have?
  6. Can I still afford the premiums?
  7. If I need to increase my cover, has my health deteriorated or am I leading a healthier lifestyle that could mean better pricing for increased cover I may want?

Beneficiaries of your life insurance policy

  1. Who are your named primary beneficiaries?
  2. Are your name primary beneficiaries still those you would like to benefit from the proceeds of your policy?

Policy features and benefits

  1. Does my policy have any guarantees? If so, what are they? Are they still beneficial to me?
  2. Are there any ‘policy review’ points that I can benefit from? E.g. ability to increase the cover without further medical underwriting.
  3. Can I borrow against the cash value of my policy from the insurance company? If so, do you want to take advantage of this feature?
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What Is A “Deductible” or “Excess”?

High-deductibles-II-resized-600.jpg

A deductible or excess is something you have on your policy when you have either, Hospital & Surgical coverage or Motor coverage. And its a dollar amount – it could be $500, $1000 or $3,000.

Quite simply put, the deductible is what you are responsible for, before the insurance company pays out anything on your behalf to fix your vehicle or seek medical treatment.

The lower your deductible, the higher your premium is going to be. Conversely, the higher the deductible you have, the lower your premium is going to be. 

Reason is this – you, the driver or the patient, are taking on more risk with a higher deductible. When you have a lower deductible, you are putting more risk on the insurance company. As a result, your premiums are effected in this way.