Thanks to the ability to pay for insurance through super, an estimated 94 per cent of working Australians have some level of life cover1. So, it’s a good idea to review your insurance regularly to make sure you have the right type of cover-and enough of it.
You probably don’t think about your insurance regularly, but there are certain times when you should consider updating your policies to make sure they still reflect your lifestyle and insurance needs.
Insurance works best when you have the right level of protection for your situation. As your life changes, so might your insurance needs. You should consider reviewing your cover whenever your situation changes, like:
These milestones mark important times to review your insurance, including the amount of cover you have and whether your beneficiaries (those who will receive your insurance in the event of your death) are up to date.
Insurance is flexible and can be changed to align to your needs. Below is a step-by-step guide to reviewing what you have.
Refer to your product disclosure statement (PDS) and read it to fully understand what you’re covered for (death, disability or injury for instance) and compare this against what you’d ideally like to be covered for.
Check if your insurance policy has an expiry date, and if so, make note of when it is so you’re not caught off guard. It can be a good idea to set yourself a reminder a month or two before it’s due so you can contact your insurance provider ahead of time.
An insurance beneficiary is the person, or people, who will receive your insurance payout in the event of your death. It’s important to make sure your beneficiaries are up to date, so your money ends up in the right hands.
To help you work out the right level of insurance cover consider the following questions.
How much money would your family have if you were to pass away or become disabled? Consider the amount of money you have in super, savings, shares and other assets, and existing insurance policies as a starting point.
How much money would your family need if you were to pass away or become disabled? Consider the size of your mortgage and any other debts you have, as well as other costs such as childcare, education and day-to-day expenses you may be covering.
The difference between these figures should provide some guidance on the amount of insurance cover you may want to have. However, you might need to compromise between what you’d like and can afford. The handy AMP Insurance needs calculator can help you crunch the numbers, and you can always ask an expert for further insurance advice.
Like many Australians, you may have insurance through super. So, it’s a good idea to check this against other policies you might have outside super.
Then compare your cover, check whether you have any insurance double ups – if you have more than one super account with the same type of insurance, you may be paying for more insurance than you need.
Something to note on your TSC insurance, you’ll most likely only be able to claim up to 75% of your pre-disability income, regardless of whether you have TSC cover within multiple super accounts.
If you’re not sure whether you’re getting the best deal, you might want to compare providers. Remember, there are other considerations to take into account aside from reduced premiums, such as what level of cover you get, any exclusions (like the treatment of pre-existing medical conditions) and waiting periods.
Also keep in mind if you do cancel your insurance, you might lose access to features and benefits, and you might not be able to sign back up at the same rate or with the same level of ease.
It’s also important to disclose your situation to your insurer honestly, or the policy might be invalid if you do need to make a claim.
If affordability is a major concern, speak to your super provider or insurer depending on what type of insurance you hold, to find out how you can manage your premiums without losing your policy. You might be able to:
Changing your insurance policy can be complicated, so it could help to speak to an expert. We are here to help.