It oft be said, ’All my insurance adviser does is turn up and sell me more insurance’. While this may be true, I hope it's for the right reasons, you have more risk. This is the point, your risks change.

What is surprising is how people set and forget their insurance, be it life or property insurance. A great example is a past colleague who had not reviewed his contents cover since university, $40,000 then might have been a great deal, now a successful business owner with teenage kids it barely covers what's in his lounge.

When it comes to your life cover, it can be more profound. One client had more than a $700,000 increase in risk in the 6 weeks following their last review, as they rushed out and purchased investment property, which necessitated a further review and an increase in coverage.

Let's take two recent review examples, both relatively new home owners who had their life insurance plan sorted 12 months ago.

One, while making the lifestyle decision at the time to live out of town and commute, has decided to find a job closer to home. This has come with a reduction in income and prompted the question, what about my income protection now I'm earning less?

For this client the change in job does not mean there is a requirement to change income protection cover, as we put in place agreed value income protection at the time. This means that their higher city income has been locked in for them, if they have a claim. Potentially this gives them more benefits compared to a typical prove the loss at claim policy, which would now have been over insured and potentially unable to be claimed fully.

The second one, in much the same initial scenario, has had pay rises, reasonably good ones at about $5-600 in the hand per month. In this case, they have also managed to pay more off their mortgage than planned. Given the change in income won't be absorbed by normal cost of living changes on the policy, a review to lock in this new income is needed.

We reduced the cover levels for debt in line with the repayment of debt, given that there is not a plan to increase debt in the future, which saves some premium. Given they are younger and this is mostly life insurance, it is not a huge reduction in premium.

With the income, we lock this in as an agreed value increase in cover, so that they have certainty that their new income, in a disability, is looked after. In addition, if they decide to take a similar approach to the client above, they to have certainty they have their income protected at this higher level.

Why is this good for you?

In both cases they, the client and not the insurance company, have the choice about reducing their cover, if they feel they need to. A much preferable approach, especially when we are talking about income.

If you want the flexibility for your cover to work how you want it to, check out more about who we are and what we do here, if you want to dive in and have us get on it for you get in touch here.