Australians have all types of insurance - whether it’s life protection, health insurance or car insurance - and for each of these, the cost of maintaining cover all adds up.
While it may seem like another expense for your household to bear, it pays to remember the reason why you have the cover in the first place.
When the unexpected occurs, your insurance cover can provide you with the financial lifeline it was intended for. That being said, life changes and as you begin to move through life, find a partner, maybe even raise a family or start a business - the importance of insurances in your long term plan increases.
If you're experiencing financial difficulty as a result of the COVID-19 environment, it makes sense to take a close look at all your expenses. Although before you get too far down the path of tightening the belt on insurances, consider these options first:
1. Look into the financial difficulty measures your insurer offers
Contact your insurer as soon as possible when you think you may need to miss a payment. According to ASIC, during the current coronavirus environment, where you are no longer able to pay premiums due to reduced income, insurers should consider how they can best respond in order to help you continue to maintain key insurance coverage. Some insurers may be able to offer premium ‘holidays’, deferrals, or reductions for a reasonable period of time to assist policyholders during this period.1
Your insurer or financial adviser, depending on the type of insurance, should be able to work through the options that may be available to you to retain cover.
2. Check if you have the option of either monthly or annual payments
It’s worth checking to see if your insurance premiums can be paid either annually or monthly. If you’re in a position to make an annual payment, it may cost less over the long term. However moving to monthly payments may make it easier on your cashflow and lessen the burden of one lump sum payment later.
3. Review your insurances to ensure it meets your needs
No matter what type of insurance you have, it’s important to review your coverage annually to ensure you are paying for what you need and if you’re paying too much. For many of us, the task of comparing what's in the market is just too overwhelming and time consuming, so we just stay with what we have. It's just easier.
Seek out an expert to do the legwork for you, and help you get cover that's competitively priced and that has the cover you need.
Expert advice matters
The global Coronavirus health pandemic has shown that we just don’t know what lies around the corner. Unforeseen tragedies could leave you and your family facing tremendous stress, however with insurances in place, it provides you the peace of mind to get on with life confidently.