Questions that you need to ask
Now that we are back to level 1 the tough questions you must ask are:
- What’s my income per week or month?
- How much am I saving per week or month?
- Do I have a ‘rainy day’ reserve?
- How long can I survive without a paycheque?
- Is my job safe?
- Will my insurance programme cover my risks?
How KSL Insurance can help
I expect that my 50 years of commercial experience and insurance expertise will be required more than ever. Everyone should now undertake a full personal and family risk assessment followed by a review of their insurance arrangements. In assessing risk there are two perspectives that you need to think about:
b. The financial risk you have the resources that you can accept.
It is the perspective b) that you must focus on. By appropriately using insurance you can put in place the resources needed to managed your risks.
Our experience is that clients will need assistance in:
- Identifying and retaining the best and most appropriate insurance products available;
- Identifying insurance products that are affordable, cost effective and maximise the cover benefits;
- Identifying insurance companies that have the capacity and desirability to meet their claims’ obligations now and over the long term.
In tough financial times the first thing many people and businesses look at are their avoidable fixed costs and insurance is one that is frequently questioned. Insurance is often viewed as a reluctant purchase, however, in times of hardship this is precisely when insurance is required. It protects against income and asset losses that you cannot afford to lose.
Fire and General Insurance
Coverage should be reviewed annually and risks that you can afford to carry should be re-assessed and deleted or alternative, lesser coverage options explored i.e. deleting benefits and raising excesses.
Alternative quotes should be obtained for increased excess options and the cost balanced against the premium reduction offered for your co-insurance. Most policies are now limited to agreed sum insured maximums; accurate assessment of replacement cost is essential.
Life and Living Insurance
Personal insurance requires a different set of considerations. Life and living insurance policies that are ‘core’ longer term contracts should be funded as level premium and ‘temporary’ shorter-term life insurance covers that are associated with children and reducing debt commitments should be funded as yearly stepped increasing premium contracts.
Rearranging premium payment programmes split between level versus yearly renewable terms can reduce life-time premiums by thousands of dollars and the policy will be in force when its required.
- Extending waiting periods on income protection policies. Changing from 30 days to 60 or 90 days can offer discounts of up to 40%.
- By adjusting a waiting period the premium saving can buy up to a year’s salary in lump sum trauma insurance.
- Premium relief. Asteron policies offer a premium holiday with full cover for up to 6 months during the life time of the contract. If your income has dropped by 20-30% and you need some help give me a call.
- Take advantage of special events non-medical upgrades. Most modern insurance policies provide a special event increase without medical or lifestyle evidence that allows the policy owner to increase their contract by up to 50% of the original face value of the policy. When you are offered these increases you should take advantage of them as they do not require any extensive form filling or medical underwriting. Generally, these offers are every five years or on the occasion of a special event being; graduation from a tertiary institution, engagement, marriage, birth of a child or adoption, purchase of home, new mortgage, or marriage dissolution/divorce or death of spouse or partner.
The outlook for insurance in the post COVID-19 world will be quite different. Insurance companies will be underwriting more diligently and will be requiring a more extensive understanding of each risk from both a physical and financial perspective.
KSL Insurance has been advised that there will be significant underwriting involved in obtaining income protection insurance and occupational classes will be viewed quite differently with respect to stress, anxiety, depression and suicide risks. Continuation of existing policy benefits are being reviewed by some companies. Financial underwriting will be more stringent with respect to levels of cover and occupation. Premiums will be subject to review.
If you are approached to change what you own by another salesperson or bank please make sure that you contact us before contemplating terminating or amending these products, as you may not be able to get the terms and conditions you currently own again.
Please contact me, Grace, or Brian if you are considering amendments to your policies.